Official interest rate hike scenario prepared by Turkey European Central Bank (ECB)It is the first that plans to continue in the period when it is implemented between 2005 and 2008paints an almost perfect picture for the results. Banking sector. The only fear on the horizon is many customers it can be seen overcome because of this increase in the price of money and stop payment your credit. But Spanish institutions see this as unlikely: the majority of their debtors they won’t fall into guilt if the monetary authority complies with these conditions smooth and gradual increase the species you are targeting.
“guilt something will rise at the end of the year or rather the beginning of the next, and then it will return. this customers can bear a gradual increase in between 1% and 2%. Our average mortgage payment is around €350, which will add up to a reasonable €50,” explains one of the industry’s main executives. better than expected. if you follow create Taskthere shouldn’t be any problems,” adds another senior executive.
President of CaixaBank, José Ignacio Goirigolzarri, He spoke similarly last week. “We will enter a region with clearly positive interest rates in Europe in the coming months. But under normal circumstances and if all goes well, there will be no steep rise. The market is making some discounts rates 1.5%. This level is reasonable and does not affect economic activityHe stated at a conference of the Spanish Confederation of Managers and Managers (CEDE).
The ECB thus showed that it was prepared. two raises your species July Y Septembercarry the deposit facility (interest charged to banks to hold money) -0.5% to 0%. Next, he plans to start raising the response rate by one level. neutral levelthat means neither an expansionary nor a restrictive monetary policy. The debate is here now: some members of his board are estimating that level. 1% or higherwhile others see close to 2%. Therefore, the market expects a level of around 1.5 percent next year, provided that inflation does not scare it further.
The bankers interviewed said that one of the factors they weren’t worried about about the impact of the rate hike was the large number of fixed rate mortgagewhose quotas have not changed in recent years houses. This was recently confirmed by governor Bank of Spain, Pablo Hernández de Cos: “As far as households are concerned, an increase in interest rates, a little distortion the ability to pay off debts. In any case, in the face of moderate increases in interest rates, this is expected to happen. the effect was not very significantpartly due to the increase in the weight of fixed rate mortgages in December 2021 observed in recent years 24.9% of outstanding balance“.
Something different is the situation of loans to companies. “A possible increase in interest rates could increase the percentage of interest rates. Business with financial pressure. In corporate bank financing, loans short-term or floating-rate term“The IESE warned in a matter of days, so the transition of interest rate changes is relatively quick,” he said. indebtedness business (as measured by the weight of financial expenses on gross operating surplus) would begin to increase in 2023, until it reached one percentage point above the 2021 level at the end of 2024.
A few months ago, a certain fear On what to expect in April and May overcome grace periods in the principal payment of a significant portion of the loans to companies with Public approval of the ICO Awarded in 2020 due to the pandemic. “We don’t see problems and we don’t expect any relevant dimension,” one banker says. “Based on what the banks told us, feeling is gooddoes not produce step effect“, confirm sources familiar with the situation.
However, there is still business sectors and household segments with a situation “most vulnerable” more than before the epidemic, as the governor had warned them. “The war brings new risks to financial stability. The direct financial risks of Spanish banks Russia and Ukraine very small, indirect effects of war important. He urged banks to be cautious, particularly through the impact on families and companies where post-pandemic recovery has slowed or delayed and their solvency may now deteriorate.