Publications

Analytical Articles

The Analytical Articles present various subjects relating to the economy and finances of Spain, the euro area and the international environment. They seek to bring the papers and analyses of the Banco de España to the attention of a broad public audience interested in current economic and financial affairs.

Since January 2017, the Analytical Articles have been disseminated ahead of the publication of the related quarterly Economic Bulletin and are listed by release date or by subject.

All documents are available in PDF format PDF File. Opens in a new window

  • 17/10/2019
    Tariff protectionist measures and Spanish goods exports (616 KB) Eduardo Gutiérrez Chacón and César Martín Machuca

    The rise in global protectionist tensions in recent years has, after decades of across-the-board declines, entailed increases in tariffs that are proving detrimental to international trade and thereby affecting the Spanish economy’s external sector outlook. This article estimates the effect of tariffs on Spanish non-energy, non-EU goods exports drawing on data broken down by country of destination and type of product. The results show that an increase in tariffs adversely impacts both export possibilities and, persistently, export values. On the estimates made, a 1% increase in import tariffs imposed by another country on a Spanish product entails a reduction in nominal exports of around 0.6%. Protectionist risks underscore the role of the EU in promoting international trade agreements, such as those recently entered into with Japan, Canada and Mercosur.

  • 10/10/2019
    Leveraged loans: definition and market development (435 KB) Carlos González Pedraz

    Over the past decade, the volume of leveraged loans has grown to reach its highest level since the end of the crisis. Growth has been more contained in Spain, which accounted for 5% of the total volume of such lending in Europe in the period 2016-2018.

    The terms and conditions of leveraged loans have become less restrictive and a large proportion is distributed among institutional investors worldwide, in the form of collateralised loan obligations (CLOs). This originate-to-distribute model poses potential risks for the financial system. In the event of a cyclical downturn the losses in this market could be significant, in particular, owing to the relaxation of investor protections. In addition, given the importance of these loans as a source of corporate financing, a rise in defaults would have adverse effects on the real economy.

  • 26/09/2019
    Results of non-financial corporations to 2019 Q2 (494 KB) Álvaro Menéndez

    On information from the Central Balance Sheet Data Office Quarterly Survey (CBQ), activity at non-financial corporations slowed in 2019 Q1, with gross value added (GVA) increasing very moderately (0.4%), below that posted in the same period last year. Employment continued to rise (0.6%), but also at a slower pace than in 2018. In this setting, the return on investment ratio declined slightly, while debt ratios rose somewhat, reversing the downward trend of recent years. However, the decline in average borrowing costs, together with the slight growth in profit, led to a further decrease in the debt burden ratio, down to all-time lows in the CBQ historical series. The article includes a box which shows that the average headcount at Spanish firms in 2017 stood below the pre-crisis level. However, despite this aggregate performance, a significant proportion of firms were able to increase their headcount during the period analysed.

  • 18/09/2019
    The relationship between average annual and quarter-on-quarter GDP growth rates: implications for projections and macroeconomic analysis (296 KB) José González Mínguez and Carmen Martínez Carrascal

    The average annual growth rate of GDP can be formulated algebraically as a weighted average of the quarter-on-quarter growth rates of the preceding and the current year. Sometimes this can give rise to counterintuitive results and misinterpretations of how the economy is evolving. For example, a given sequence of GDP growth rates, in quarter-on-quarter terms, in the current year, may give rise to very different average annual rates depending on the trajectory of GDP in the preceding year. Also, with given quarter-on-quarter growth figures for the four quarters of a particular year, average GDP growth will be higher, the earlier in the year that the largest quarter-on-quarter increases occur.
    In the context of macroeconomic projections, analysis tends to focus on average annual GDP growth rates, insofar as they offer a summarised version of the outlook. However, it should be noted that revisions to the current year’s projections with a particular sign (for example, upwards) may reflect changes of two types: first, the publication of new, more favourable National Accounts data for past quarters; and second, a downward revision to growth prospects for the remaining quarters of the year. Therefore, it would be a mistake to conclude from the mere observation of an upward revision to average annual growth that the economic outlook has improved.

  • 11/09/2019
    Banco de España macroeconomic projections: comparison with an econometric model (221 KB) Gergely Ganics and Eva Ortega

    The forecasting of macroeconomic variables is an important task of the Banco de España for the satisfactory monitoring of the economic situation. Macroeconomic projections are made by combining various econometric models with expert judgement. This article compares the Spanish GDP growth and inflation projections published by the Banco de España with those that would be obtained automatically from an alternative econometric model. This exercise reveals that the Banco de España’s projections surpass those of the econometric model in terms of how closely they coincide with the variables predicted (GDP and inflation), i.e. they have smaller prediction forecasting errors. This confirms that the information provided by expert opinion improves the accuracy of projections, above all in short time horizons and, in particular, in predictions of GDP growth. It is also found that, in the past decade, the accurate prediction of inflation has been considerably more difficult than that of GDP growth.

  • 01/08/2019
    Recent developments in the rental housing market in Spain (575 KB) David López-Rodríguez and María de los Llanos Matea

    The proportion of the population living in rental housing in Spain is low compared with the main EU economies. However, in recent years there has been a perceptible rising trend in the relative weight of rental housing in the Spanish residential market. The most significant and dynamic aspects of this development are concentrated in specific groups (essentially young households, immigrants and temporary workers) and specific areas (above all in Madrid, Catalonia, the Balearic Islands and the Canary Islands). One key factor behind the rise in the demand – especially among young households – for residential rentals is the difficulties lower-income groups face in raising their income. This is due to still-high unemployment, the scant duration of new employment contracts and the greater significance of shorter contract hours. The reduction in the average loan-to-value ratios of new mortgages, the concentration of economic activity in geographical areas with a rigid supply of residential housing and the tax arrangements associated with housing are other factors that have contributed to a notable increase in demand in the market for residential rentals in Spain. The rise in demand concentrated in specific markets set against a relatively rigid supply of residential rentals in the short term would explain the dynamism of rental prices in these locations. Such robust demand in specific markets has been countered only in part by the increase in private supply following the entry of new professionalised agents in the rental market. Encouraging these new entrants will have been the increase in the gross return on residential rentals in the 2014-2017 period. The diminished buoyancy of supply has come about against the background of the weak public supply of rentals, marked by the emergence of alternative sources for residential housing such as the holiday rental. For a fuller analysis of the residential rental market in Spain, greater socio-demographic and economic information would be needed – including rental prices – at the municipal level or with the greatest geographical breakdown possible.

  • 24/07/2019
    Recent developments in financing and bank lending to the non-financial private sector (578 KB) Pana Alves, Fabián Arrizabalaga, Javier Delgado and Irene Roibás

    This is the first of a series of analytical articles that will examine, on a half-yearly basis, recent developments in funds raised by the Spanish non-financial private sector and resident deposit institutions’ credit exposure to the sector. In the early months of 2019, the conditions of access to bank finance for Spanish firms and households remained highly accommodative; however, after several years in which these conditions had gradually eased, signs are now emerging that suggest that this tendency may be coming to an end. Nevertheless, deposit institutions’ total outstanding credit exposure to the non-financial private sector continued to decline in 2019 Q1 (2.1% year-on-year). The NPL ratio also continued to fall.

  • 23/07/2019
    Bank Lending Survey in Spain: July 2019 (425 KB) Álvaro Menéndez Pujadas

    The results of the Bank Lending Survey reflect, in general, a slightly less expansionary credit supply, both in Spain and the euro area, in 2019 Q2. Thus, credit standards tightened in Spain in the two household segments, while in the euro area standards tightened for both lending to enterprises and consumer credit and other lending to households. By contrast, terms and conditions for new lending eased somewhat in the consumer credit segment, both in Spain and the euro area, while for lending to enterprises they eased in Spain but tightened in the euro area. Spanish banks reported a decline in demand for loans to enterprises and for consumer credit and other lending to households, whereas loan applications increased across the board in the euro area. The conditions of access to retail and wholesale financial markets remained stable or improved both in Spain and the euro area. According to the banks surveyed, regulatory and supervisory measures on capital, leverage and liquidity prompted a degree of tightening in the credit supply in 2019 H1, again both in Spain and the euro area. Lastly, between January and June 2019, the NPL ratio also contributed to some tightening of the credit supply in both areas.

  • 11/07/2019
    Financial position of euro area households in 2018 (371 KB) Ana del Río and José Antonio Cuenca

    Drawing on the accounts for the institutional sectors, this article describes how euro area households’ income, savings, borrowing and financial wealth evolved in 2018. The improvement in the labour market and the more dynamic wage performance continued to boost household income and this, together with the increase in asset (especially housing) values, and against a backdrop of very low interest rates, sustained household expenditure. The saving rate rose slightly in the euro area overall, although with considerable differences between countries. Households’ demand for finance continued to grow at a moderate pace, resulting in a slight dip in their debt-to-income ratio.

  • 20/06/2019
    Results of non-financial corporations in 2019 Q1 (752 KB) Álvaro Menéndez

    On information from the Banco de España Central Balance Sheet Data Office Quarterly Survey (CBQ), activity at non-financial corporations remained expansionary in 2019 Q1, although some indicators point to a certain degree of deceleration. Employment continued to rise, but also at a slower pace than in 2018. In this setting, corporate profitability ratios held steady, while borrowing costs declined again, prompting a further slight widening of the spread between return on investment and the cost of debt. Debt ratios rose somewhat, reversing the downward pattern of recent years. Lastly, the decline in borrowing costs and the growth in profit led to a further decrease in the debt burden ratio, down to all-time lows in the CBQ historical series. The article includes a box that analyses certain aspects of the recent performance of SMEs in Spain, drawing on qualitative data taken from the ECB’s survey on access to finance of enterprises (SAFE).

  • 18/06/2019
    Characterisation of self-employment in Spain from a European perspective (639 KB) Pilar García Perea and Concepción Román

    In Spain, self-employment currently accounts for 16% of those employed, a proportion slightly higher than the EU average. Compared with the prevailing structure among employees, it is males, the over-50s, those with a low level of educational attainment and those employed in traditional sectors such as agriculture, wholesale and retail trade, transport and accommodation who are over-represented in this group. Relative to self-employed workers in the EU, self-employment in Spain accounts for a smaller proportion of the total in the liberal professions in services, generally associated with a higher level of skill. In Spain, the incidence of self-employment economically dependent on a single client is relatively moderate compared with other European countries; but the high incidence of the self-employed who choose to work as such out of necessity, given the lack of alternatives, is notable. Lastly, in all euro area countries, households with a self-employed family head are seen to be wealthier than those with a wage-earning family head, and Spain is in an intermediate position.

  • 13/06/2019
    The impact of TLTROs on banks’ lending policies: the role of competition (401 KB) Miguel García-Posada Gómez

    This article assesses the impact of the targeted longer-term refinancing operations (TLTROs) of the European Central Bank (ECB) on the credit supply of the euro area banks. An empirical approach is used that permits distinction between the direct and indirect effects of the TLTROs. The direct effects are that banks participating in the TLTROs increase their credit supply thanks to the lower costs prompted by these refinancing operations. The indirect effects stem from the changes that the TLTROs produce in the competition between banks in the loan and deposit markets and which also affect banks that do not participate directly in the programme, albeit in principle with an ambiguous sign. Taking a sample of 130 banks from 13 countries and their confidential replies to the ECB Bank Lending Survey, it is found that the TLTROs played a direct part in reducing the margins on lower risk loans and easing credit standards in the large enterprises segment. As regards the indirect effects, it is observed that the TLTROs also eased credit standards at non-participating banks, primarily at banks exposed to high competitive pressure, so it appears that the TLTROs increased the supply of bank credit through the indirect channel also.

  • 11/06/2019
    Financial flows and balance sheets of households and non-financial corporations in 2018 (530 KB) Víctor García-Vaquero and Juan Carlos Casado

    The Financial Accounts of the Spanish Economy (FASE) show that in 2018 households received positive net bank financing for the first time since 2011, mainly due to the increase in consumer credit and other lending, while their saving ratio continued to fall, to a new historical low. These developments were, however, compatible with a further reduction in household bank debt (to 59% of GDP, down 26 percentage points (pp) from its peak in 2010). At the same time, the gross financial wealth of households edged down, for the first time since 2012, mainly as a result of the fall in value of their holdings of financial instruments caused by the global financial market tensions in the latter months of 2018. As regards firms, although their total borrowing in consolidated terms was positive in 2018, their debt ratio fell to 75% of GDP at the end of the year (down 43 pp from its 2010 peak). The market value of the equity securities of firms fell by 4.1% in 2018. This fall, the first since 2008, was a consequence of moderate fund raising and especially of the decline in value of these liabilities, largely owing to the drop in stock market indices at the end of 2018 (this drop was, however, reversed in the first few months of 2019).

  • 04/06/2019
    Real-time regional GDP forecasting: statistical aspects and a forecasting model (711 KB) Concha Artola, María Gil, Danilo Leiva, Javier J. Pérez and Alberto Urtasun

    The monitoring of the regional economic situation takes on particular importance in highly decentralised countries, such as Spain. Against this background, this article summarises the key aspects of the BayFaR model (Bayesian Factor model for Regions), a new tool used by the Banco de España for the short-term forecasting of the GDP of the Spanish economy and of its biggest regions. The tool allows monthly indicators of activity to be combined with quarterly GDP, the benchmark variable for conjunctural analysis. In Spain’s case, however, it is necessary to use alternative measures of this variable. This is because the official statistics do not provide a homogeneous measure for all the regions, nor one that is consistent with INE’s national quarterly GDP.

  • 23/05/2019
    The balance of payments and international investment position of Spain in 2018 (698 KB) Pana Alves, César Martín and Irene Roibás

    According to the balance of payments (BoP) statistics, in an environment of ongoing economic upturn, Spain was once again a net lender in 2018, albeit to a lesser extent than in preceding years. The decline in net lending is explained by the decrease in the goods and services surplus, which largely reflected the slowdown in external markets, the negative impact on exports of the cumulative euro appreciation since 2017 and the rise in oil prices. The nation’s net lending, the positive amount of other flows and GDP growth were conducive to a decline in the Spanish economy’s negative net international investment position (IIP), as a percentage of GDP, for the fourth year in succession. In terms of financial flows, international investors made net purchases under the portfolio investment (mainly, long-term bonds issued by general government) and direct investment headings in 2018, a sign of their continuing confidence in the Spanish economy, despite the deterioration in the global macro-financial scenario in the second half of the year. However, the fact that the Spanish economy’s negative net IIP remains high (77.1% of GDP), both historically and by international standards, makes it vulnerable to shocks in the international capital markets.

  • 22/05/2019
    Some implications of new data sources for economic analysis and official statistics (481 KB) Corinna Ghirelli, Juan Peñalosa, Javier J. Pérez and Alberto Urtasun

    On the back of new technologies, new data sources are emerging. These are of very high frequency, with greater granularity than traditional sources, and can be accessed across the board, in many cases, by the different economic agents. Such developments open up new avenues and new opportunities for official statistics and for economic analysis. From a central bank’s standpoint, the use and incorporation of these data into its traditional tasks poses significant challenges, arising from their management, storage, security and confidentiality. Further, there are problems with their statistical representativeness. Given that these data are available to many agents, and not exclusively to official statistics institutions, there is a risk that different measures of the same phenomenon may be generated, with heterogeneous quality standards, giving rise to confusion among the public. Some of these sources, which consist of unstructured data such as text, require new processing techniques so that they can be integrated into economic analysis in an appropriate format (quantitative). In addition, their use entails the incorporation of machine learning techniques, among others, into traditional analysis methodologies. This article reviews, from a central bank’s standpoint, some of the possibilities and implications of this new phenomenon for economic analysis and official statistics, with examples of recent studies.

  • 17/05/2019
    The impact of China on Latin America: trade and foreign direct investment channels (621 KB) Jacopo Timini and Ayman El-Dahrawy Sánchez-Albornoz

    The economic, political and institutional ties between Latin America and China have become closer as the Chinese economy has grown. Indeed, as a result of its rapid economic growth, China now plays a systemic role in the world economy. However, since the global financial crisis, the Chinese economic model has shown signs of exhaustion and controlling the rate of growth may prove to be a particularly difficult challenge, taking into account the profound structural transformation to be addressed and the high level of debt of the Chinese economy. Against this backdrop, the article provides an empirical analysis of the effects on the Latin American countries’ growth of their trade and investment relations with China. It also analyses the channels through which the Chinese economic slowdown is transmitted to the region. The study shows that, through the trade channel at least, an unexpected slowdown in China could have a negative impact on economic growth in Latin America.

  • 16/05/2019
    Capital flows to emerging economies: recent developments and drivers (571 KB) Luis Molina and Francesca Viani

    Emerging markets have gained prominence as recipients of capital flows since the onset of the financial crisis in 2008. This raises their exposure and goes hand in hand with greater dependence on external financing and heightened sensitivity to global shocks. However, some differences can be observed across regions. For example, while the more stable types of capital flows (direct investment) continue to outweigh other types in Latin America, in Asia and the Middle East the recent increase in capital inflows has taken the form of debt, private in the case of Asia and mostly government debt in the Middle East. Against this background, this article examines the impact on the capital flows to these economies of five potential global shocks: an appreciation of the dollar, a fall in commodity prices, an increase in global aversion to risk, expectations of monetary policy tightening in the United States and lower regional growth compared with advanced economies. The findings of this article suggest that the factor with the greatest impact on portfolio flows to emerging markets is the appreciation of the dollar although, in the case of Latin America, commodity prices also play a very significant role.

  • 14/05/2019
    Report on the Latin American economy. First half of 2019 (1 MB)

    This article reviews the recent performance of the main Latin American economies, in a difficult external environment, owing to the slowdown in the world economy and the uncertainty associated with trade tensions. Growth in 2018 was lower than in 2017 and lower than projected at the start of the year, primarily on account of the severe recession in Argentina and a slower than expected recovery in Brazil. Activity is expected to be more positive in these countries in 2019, but a slowdown is forecast in Mexico. In addition, the risks remain predominantly on the downside. Among the internal risks, the uncertainty surrounding the economic policies to be implemented in Brazil and Mexico stands out. This issue is analysed in detail in this article. Two other articles on specific aspects of the performance of the Latin American economies will be published together with this one: “Capital flows to emerging economies: recent developments and drivers”, and “The impact of China on Latin America: trade and foreign direct investment channels”.

  • 09/05/2019
    The latest protectionist trade trends and their impact on the European Union (682 KB) Francesca Viani

    In an attempt to rebalance trade with China, the United States administration decided in early 2018 to introduce a series of protectionist measures affecting certain imports in particular. This gave rise to an escalation of US-China trade tensions. The new tariffs have affected a significant percentage of Chinese exports to the United States, but their impact on EU trade has only been marginal to date. The indirect effects on European economies through the global value chains have also been limited. However, possible tariff barriers on the automotive sector could raise the affected trade flows substantially.
    Simulations made with econometric models confirm that the tariff measures adopted to date would have relatively moderate direct effects on global economic activity and on EU countries. That said, the simulations also warn that a decrease in business confidence and an unfavourable reaction by international financial markets could amplify such adverse effects. Additionally, possible future auto sector tariffs could have a significant impact on European economies in an industry already facing important challenges associated with the structural and technological transformation process currently under way.

  • 09/05/2019
    World economic outlook for 2019 (734 KB) Pedro del Río and Esther Gordo

    Recent weaknesses in the world economy have prompted a downward revision of forecasts for 2019. The baseline projection scenario points to a widespread easing of growth, albeit more so in some areas than in others, against a backdrop of high uncertainty and significant downside risks. These include, most notably, the possible proliferation of protectionist measures, a disorderly no-deal Brexit, a sharper than expected slowdown in China or in the euro area, or a severe financial market adjustment. Any – or a combination – of these events could have a significant impact on the world economy, in a setting in which there is little room for manoeuvre in macroeconomic stabilisation policies.

  • 11/04/2019
    Recent housing market developments in Spain (1 MB) Pana Alves and Alberto Urtasun

    After the sharp correction during the crisis, activity in the Spanish real estate sector commenced its recovery in early 2014. This improving trend has since been observable both in quantity and price-based indicators. However, this market is well known for its high heterogeneity due to the location of the properties, their type and the nationality of purchasers. The recent buoyancy seems to reflect, among other factors, positive labour market developments and the low cost of borrowing against a backdrop of gradual growth of loans for house purchase.

  • 09/04/2019
    The April 2019 Bank Lending Survey in Spain (618 KB) Álvaro Menéndez Pujadas

    The results of the Bank Lending Survey show somewhat less expansionary behaviour of loan supply and demand in 2019 Q1, both in Spain and in the euro area. Thus credit standards for approving loans tightened in both areas in the two segments of lending to households and did not change in loans to enterprises. The terms and conditions for new loans held steady both in Spain and in the euro area, except those for consumer credit and other lending, which eased in Spain and tightened in the euro area. For the second quarter of 2019, the banks of both areas did not anticipate further tightening of credit standards save those for loans to households for house purchase in the euro area. Loan demand in Spain decreased both in that from enterprises and in that from households for consumer credit and other lending, while that from households for house purchase increased. By contrast, in the euro area, the demand for loans to households increased, although that for consumer credit and other lending slowed, and the demand for loans to enterprises stopped growing. According to banks in both areas, the conditions of access to financial markets remained unchanged or even improved, both in retail markets and in nearly all wholesale markets. The ECB expanded asset purchase programme continued having a positive effect on the liquidity and financing conditions of banks in the past six months, although it had a negative impact on their profitability. In addition, this programme continued to foster, in nearly all segments, an easing of loan terms and conditions and an increase in the volume of loans granted. The negative interest rate of the ECB deposit facility contributed, over the past six months, to a decrease in the net interest income of banks in the two areas and to an increase in credit volumes.

  • 29/03/2019
    Artificial intelligence in financial services (437 KB) Ana Fernández

    The use of artificial intelligence tools has escalated recently in all sectors of the economy owing, among other factors, to the growing volume of digital data and higher computational capacity. Major benefits may be reaped from applying these tools to the provision of financial services, not only for financial institutions but also for society as a whole. This article describes some of those benefits, and also some of the main uses being made of these tools, both by financial institutions and central banks. It also indicates the main limitations of the technology and its possible implications for the correct functioning of the financial system.

  • 26/03/2019
    Results of non-financial corporations to 2018 Q4: preliminary year-end data (767 KB) Álvaro Menéndez and Maristela Mulino

    The activity of non-financial corporations remained on an upward trend in 2018, leading to overall increases in ordinary profit (ordinary net profit grew by 5%, up 0.3 pp from 2017) and employment, which were also seen in most sectors and firms. As a result of the good corporate earnings performance, average rates of return continued to improve, and the spread over the cost of borrowing widened further. Extraordinary revenue and costs had a positive impact on net profit in 2018, resulting in strong net profit growth. Average debt ratios, relative to assets and ordinary profit, fell. Lastly, the debt burden ratio also declined, driven by the lower cost of borrowing and the growth in surpluses. A box analysing the recent developments in trade credit and average payment and collection periods is included in this article.

  • 12/03/2019
    Adapting lending policies against a background of negative interest rates (603 KB) Óscar Arce, Miguel García-Posada and Sergio Mayordomo

    Since June 2014 the European Central Bank (ECB) has placed its deposit facility interest rate (DFR) at negative levels. Against this background, the question arises as to whether maintaining negative interest rates over a prolonged period can adversely affect credit institutions’ net interest income and, ultimately, the supply of credit. Euro area banks’ responses to the Bank Lending Survey (BLS) enable the banks to be classified into two groups, depending on whether their net interest income has been impaired or not by the negative rates (“affected” versus “unaffected” banks). The analysis in this article shows that the affected banks are generally not as well capitalised. This circumstance might have hindered these banks from taking on fresh risks under their lending policy in order to attempt to offset the adverse effect of the negative rates on their unit lending margins. Indeed, the banks most affected by negative interest rates tightened the terms and conditions on their loans to a greater extent than those unaffected, to optimise their risk-weighted assets and, therefore, their capital ratios. Lastly, the article shows there are no differences between both groups of banks as regards the total credit offered and that the credit supply has been adapted via loan terms and conditions and not through the total amount offered. This result suggests that the current level of the DFR (-0.4%) is not causing a contraction in the volume of credit supplied by the banks affected.

  • 21/02/2019
    The Eurosystem’s monetary policy following the end of net asset purchases (627 KB) Óscar Arce, Galo Nuño and Carlos Thomas

    This article analyses the monetary policy conduct framework in the euro area following the end of net purchases under the financial asset purchase programme. First, there is a review of the monetary policy measures since 2014 and of the ECB’s announcements on the future course of its instruments, comparing the recent changes in euro area monetary policy with the normalisation of US monetary conditions initiated by the Federal Reserve in 2013. Second, the authors analyse the main instruments currently available to the ECB (forward guidance on interest rates and its asset portfolio reinvestment policy), and discuss how both instruments provide monetary stimulus in the current setting.

  • 12/02/2019
    The loan to value ratio for housing in Spain over the period 2004-2016 (601 KB) Olympia Bover, María Torrado and Ernesto Villanueva

    The ratio between the amount of mortgage loans and the value of housing (the loan to value ratio) is a useful indicator for studying the financial situation of households. Two main price indicators are used to measure loan to value ratios for housing in Spain at the time of purchase: the transaction price recorded at the Property Registry and the appraisal value. Having generated a sample in which both price indicators refer to the same set of housing, the median loan to value ratio between 2004 and 2007 is found to stand between 70%, when the appraisal value is used, and 107%, when the transaction price is used. The difference between these two ratios narrowed from 2010, with the loan to value ratio using the appraisal value remaining at around 70%, while the ratio based on the transaction value fell to 80%. The Spanish Survey of Household Finances (EFF), conducted by the Banco de España, is an alternative data source, allowing a loan to value ratio to be obtained directly from households’ responses. This ratio, based on EFF data, has evolved in a similar way to the one derived from the transaction prices recorded at the Property Registry.

  • 22/01/2019
    The January 2019 Bank Lending Survey in Spain (616 KB) Álvaro Menéndez Pujadas

    In 2018 Q4, according to the Bank Lending Survey (BLS), credit standards for consumer credit and other lending to households tightened slightly both in Spain and in the euro area. There were no appreciable changes in the other two lending segments. For the current quarter, Spanish banks anticipated a slight tightening in all lending segments, a development also observable in the euro area – albeit to a lesser degree – in practically all segments. The overall terms and conditions on new loans eased across the board, both in Spain and, more moderately, in the euro area as a whole. In Spain, the demand for credit fell both in loans to enterprises and loans to households for house purchase, and it ceased to grow in consumer credit and other lending to households; in the euro area as a whole, meantime, loan applications grew across the board. Conditions of access to wholesale funding markets worsened, both in Spain and in the euro area, whereas in retail markets the changes were minor and of a different sign. According to the banks surveyed, regulatory and supervisory measures in respect of capital, leverage and liquidity did not exert an appreciable impact on the supply of credit in Spain in the second half of 2018, whereas in the euro area they prompted some tightening. Finally, the NPL ratio did not exert any influence on Spanish banks’ lending policy in the second half of 2018, while in the euro area they contributed to some tightening in the supply of credit in all segments.

  • 10/01/2019
    Spanish banks’ internationalisation strategy: characteristics and comparison (414 KB) Isabel Argimón

    Banks’ international strategy and the way in which they have expanded are explanatory
    factors for the economic effects of their activity. Based on information from individual
    institutions, the internationalisation strategies of banks based in Spain, the Netherlands
    and the United States have been compared. In addition, in the Spanish case, whether
    banks’ risk, efficiency, return and income source type differ according to the chosen
    model of internationalisation has been tested. The results of this comparison point to
    Spanish banks with subsidiaries and branches abroad having higher returns but also
    higher costs than banks whose foreign business is mainly cross-border.

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