Following the Credit Suisse crisis and the collapse of Silicon Valley Bank, the Bank of Spain has stressed the need to reinforce governance and risk controls within the banking sector. At a PwC-organized conference, Margarita Delgado, the institution’s vice president, noted that Spanish banks currently have exposure to the Swiss institution, but the risk of a crisis similar to SVB in Spain is unlikely. She also emphasized that the current European framework for crisis management remains sound, while awaiting the European Commission’s proposals on organizational behavior to clarify certain elements.
Delgado highlighted that stability depends on a robust governance framework because events of this scale are unpredictable. Crises tend to reveal weaknesses in governance and risk management, which then become catalysts for reforms across the European and Spanish financial systems. She asserted that notable progress has already been achieved.
On the same day, Alejandra Kindelán, president of the banking employers’ association, reaffirmed that there is no contagion risk for Spanish banks. He praised Spain as home to some of Europe’s and perhaps the world’s strongest banks and bankers during an appearance at the New Economic Forum.
Differences between Spain and Europe
The Bank of Spain conveyed a message of calm while outlining notable differences between European and American markets. The business model of SVB cannot be directly compared with that of European banks. The guaranteed portion of deposits and the heavy focus on long-term fixed income assets were particularly affected by the Federal Reserve’s gradual rate increases.
In Spain, approximately 66% of deposits are guaranteed, according to the vice-governor, while SVB’s guarantee level was much lower. Moreover, about 96.5% of account holders – roughly 60.4 million Spaniards – have deposits under 100,000 euros, a figure that underscores the retail nature of most holdings. This has historically contributed to greater stability in Spanish deposits.
Liquidity requirements are another point of distinction. Europe imposes robust liquidity standards, and Spain adheres to these rules across all banks. The average short-term liquidity ratio in Europe stands around 165%, with Spain at 184% and the United States at 118%. The quality of liquid assets, primarily cash and central bank reserves, supports this strong position.
Bank Association
Delgado reiterated that European banks are well positioned to absorb higher interest rates. Assets tend to reprice more quickly than liabilities, helping banks maintain resilience as rates rise. The region’s financial institutions remain under vigilant supervision by European and national authorities. The current banking crisis serves to highlight the importance of a robust global regulatory, supervisory, and resolution framework, and it underscores the need for continued collaboration within the Banks Association, even as positions evolve in response to evolving market conditions.