Series: Analytical Articles.
Author: Luis Fernández Lafuerza and Javier Mencía.
Topics: Economic situation | European Union | Spain | International Economy | Financial analysis.
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Abstract
This article assesses the cost of bank equity in Spain and the euro area since 2007, focusing particularly on the period of the COVID-19 pandemic. There was a marked rise in the cost of equity in March 2020, followed by a decline in the subsequent months. The article assesses the factors responsible for this movement, and compares it against the change in interest rates on alternative bank funding instruments.