The Spanish Experience

Ana Rubio, Olga Gouveia and José María Álvarez
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Ana Rubio: BBVA Research
Olga Gouveia: BBVA Research
José María Álvarez: BBVA Research

Chapter 4 in Non-Performing Loans and Resolving Private Sector Insolvency, 2017, pp 71-92 from Palgrave Macmillan

Abstract: Abstract The chapter looks at how the Spanish authorities addressed the problem of rising non-performing loans in domestic banks’ balance sheets in the aftermath of the global financial crisis. The Spanish financial system has been completely restructured following the outbreak of the global crisis of 2007–2008. During the first phase, in 2008–2011, measures implemented by authorities were intended to address a liquidity crisis, for example, by introducing a public guarantee programme on debt issued by banks in the wholesale markets. It was not until 2012 that the real nature of the problem was identified: a highly indebted private sector and a significant amount of problematic assets, concentrated in certain portfolios (real estate) and entities (savings banks). Overall, the Spanish experience shows that it is of utmost importance to acknowledge the asset quality problems and to understand their origin in an initial phase of the process. Both private and public initiatives should be coordinated and ambitious, such as to face the problems in a comprehensive way.

Keywords: Non-performing loans; Spanish banking system; Credit risk; Macroeconomic determinants; Savings banks; Real estate sector (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-3-319-50313-4_4

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DOI: 10.1007/978-3-319-50313-4_4

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