Financial Stability Report. Spring 2024

Financial Stability Report. Spring 2024

Key messages

• The vulnerabilities and risks related to financial stability are to some extent contained, at medium levels.
• Having declined over the past year, inflation could be driven back up by a possible escalation of geopolitical tensions, which would weigh on economic activity with potential implications for the stability of the Spanish financial system.
• High government debt remains a significant vulnerability for the Spanish economy, and a consolidation plan needs to be implemented in 2024, within the new European fiscal rules.
• The banking sector's profitability improved in 2023, driven once again by marked growth in net interest income, and its solvency increased slightly, although the gap with respect to the EU average has not narrowed.
• The macro-financial indicators suggest the risks to financial stability are neither very high nor low, with the decline in lending slowing, and positions in output and the real estate and financial markets that are either neutral or expansionary.