Financial Sector & Digitalization

Financial Sector & Digitalization

The Financial and Digitization Area monitors the situation of the financial system, with special attention to the banking sector and groups of savings banks, and its digital transformation.

In this area, research of international diffusion in the financial system is carried out, developed by the researchers that form it and also through collaborations of the same with other world-renowned researchers. Among the topics that are most developed are financial and banking regulation and its effects, the competitive structure of the banking sector, the means of payment for business financing and the role of finance in economic growth.

The digital transformation of the Spanish financial system is analyzed through the Observatorio de la Digitalización Financiera (ODF). The objective of this Observatory is to generate, accumulate and disseminate information on the progress of the digital transformation in the Spanish financial system.



Challenges for Spanish banks: 50 years after deregulation

Since its deregulation 50 years ago, the Spanish banking sector has been shaped by significant structural transformation as a result of the need to adapt to an ever-changing environment, to which it has demonstrated resilience and flexibility. On top of profitability pressures, the management of risks under the growing regulatory push to increase solvency, on the one hand, and technological challenges, on the other, remain the most important issues facing the Spanish banks in the years to come.


Deposits and the transmission of monetary policy

Bank deposits have been shown to play a role in shaping monetary policy and access to credit. Crucially, firms entering the tightening cycle relying on credit from lenders with higher duration gaps could be significantly less likely to obtain funding as tightening starts, with this likelihood becoming increasingly lower for banks experiencing deposit outflows.


Interest rate risk hits central banks

The interest rate risk deriving from the mismatch between asset and liability maturities and/or repricing, which had spread across the US banking system one year ago, has now hit the central banks – with some reporting zero profit, or even losses in 2023. While this phenomenon is not expected to have implications for financial markets stability, there may be important implications related to fiscal policy and monetary policy settings going forward.


Spain’s private sector debt service ratio: An international comparison

The rate tightening embarked on by the ECB in mid-2022 has had a negative impact on debt sustainability for both Spanish corporations and households; however, the ultra-low rate environment until 2022, together with ongoing private sector deleveraging, offset the spike in interest rates such that debt service costs did not increase in 2023. As a result, last year, debt service for both Spanish corporations and households, at 34.7% of gross operating surplus and 5.6% of gross disposable income, respectively, remained low relative to international standards.


Think tank dedicated to economic and social research

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