How can we protect our economy when disaster strikes?
Just a year ago, the Valencia flash floods shook Spain and raised doubts about our ability to cope with extreme weather conditions. How can we mitigate the social and material costs? What happens to an economy when devastation hits and cash is damaged? How can the Banco de España help in this kind of natural disasters? Join us in this special episode, dedicated to all the people affected by the floods and those who were part of the surge in solidarity that followed.
29/10/2025
Banco de España
- Cash, coins and banknotes
- Financial stability
- Climate change and green transition
“We had to know what was happening and provide people with cash. At the time, there was no electricity, they were completely cut off, and needed cash to buy everything.”
How can an economy be rebuilt when everything is covered by mud?
Streets turned into rivers, homes were destroyed and lives were lost. The Valencia flash floods left devastation in their wake and tested the resilience of the whole system.
Amid the chaos and mounting concern, the Banco de España knew from the outset that people had to come first. How did it respond to the disaster?
Cash is essential in times of crisis, but the news after the floods was bleak. Banknotes and coins were buried under the mud and ATMs were not operational. With no electricity, internet or phones, using other means of payment was not an option. Carmen del Álamo, from the Cash Analysis Division, tells us how the Bank acted swiftly to ensure that people had access to cash and to salvage damaged banknotes and coins.
One year on, almost €14 million worth of banknotes and coins have been recovered, repaired or replaced, and then refunded.
However, as Isabel Alcalde, from the Financial Education Division, points out, reconstruction had to go beyond the material. The Banco de España set out to help families affected by the floods by providing financial assistance and IT equipment. The challenge was to make the application process easier for those who had lost everything, including their ID. The response: €150,000 in financial aid for students.
The flash floods also threatened financial stability. When they were most vulnerable, those who had lost everything needed access to credit to rebuild their lives. Raquel Vegas, from the Financial Stability and Macroprudential Policy Department, explains how they monitored the damage and risks to the financial system, which successfully navigated an unprecedented climate crisis.
The Valencia flash floods have taught us the importance of being ready for the possible effects of climate change, which are increasingly evident, and of exploring, both at the Banco de España and other public institutions, new ways to mitigate their social and economic impact.
