governor Bank of Spain, Pablo Hernandez de Cospointed out that an unprecedented process is taking place this Wednesday. rise children accelerated by European Central Bank (ECB) started in July of last year to combat the inflationary spiral This “closer and closer to the end”. The message is for market expectationsthey foresee Two new increases of 0.25 points percent in June and July that will receive tMajor IPO at 4.25% (highest since July 2008, when the previous crisis broke out), deposit facility -the interest paid on money held by banks will increase, which is most relevant in the current context at 3.75%.
log data euribor up to 12 monthsThus, they are found in their environment. 3.7-3.8% since mid-April compatible At the level the market expects from official interest rates. The governor, yes, has warned of this at some IESE banking conferences. expectations With regard to the price of money, it is necessary confirm prediction This is the ECB inflation eases. Otherwise, it may be necessary more raise.
The governor’s message should also be interpreted in this context. conflict between two souls Coexisting within the ECB: that of those advocating a flexible and broad interpretation of its mandate that takes more account of the economic situation (‘pigeons‘, often among them), against those of those who advocate adhering to price stabilization goals (‘Hawks‘). That’s why Hernández de Cos spent several months publicly making more or less implicit bets on the prudent tightening of monetary policy against the governors of other national central banks, who advocated more aggressive action.
On the other hand, Hernández de Cos estimates that the ‘tax’ imposed on banks by the Government will predictably cost banks the equivalent of 5% of their profits in 2022 this year. The message is credible, thanks to “high resilience and high solvency and liquidity due to regulatory reform over the last 10 years” in Spanish banking. But at the same time, their institutions are once again trying to capitalize on the “short-term” profit improvement from the rate hike, and to repay some of the increase in results and capitalize on them. called for reinforcement.