The United Kingdom’s departure from the European Union points to a bleak outlook for the European banking sector. What will be the cost for Spanish banks? It is difficult to specify. All supranational institutions agree on an economic cost that is not very significant for the European economy, naturally including Spain. The European Central Bank (ECB) refers to a figure, in the worst-case scenario, of half a point over three years. In this sense, the impact on Spanish banking is also limited.
Market instability is a different matter. And through risk aversion, the potential impact on the sector’s market valuations. But here we are talking about a general problem. It is fundamental that international authorities continue their efforts to prioritize financial stability, especially in terms of the financial sector.
Furthermore, the favorable market financing conditions fostered by the ECB can continue to facilitate the pending adjustments in the sector.
