2023/Q2 Article 04. The Spanish economy and banking system’s exposure to material third countries

Series: Economic Bulletin.

Author: Erik Andres-Escayola, Juan Carlos Berganza, Begoña Lara and Elena Vidal

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2023/Q2 Article 04. The Spanish economy and banking system’s exposure to material third countries (515 KB)

Abstract

Rationale

Each year, the Banco de España identifies a list of third countries (i.e. those outside the European Economic Area) to which Spanish credit institutions have relevant exposures. To that end, it is important to analyse the Spanish economy’s exposure to these material third countries from a number of perspectives.

Takeaways

• In 2022, the Banco de España identified the United Kingdom, the United States, Mexico, Brazil, Türkiye, Chile, Peru and Colombia as material third countries for the Spanish banking system. This article describes the Spanish economy’s banking, trade and financial exposure to these countries.
• The most significant exposures are to the United Kingdom, which heads most of the variables under consideration. The United States also ranks very highly among the developed countries.
• Among the emerging market economies, the exposure to Brazil and Mexico in terms of bank assets and liabilities and Spanish outward foreign direct investment is noteworthy. The degree of exposure to other countries is much lower, with Chile and Türkiye ranking above Colombia and Peru.