Joaquín Maudos (Professor of Economics at the University of Valencia, Director of Research at Ivie and collaborator of CUNEF) has published a new article in SEFO - Spanish Economic and Financial Outlook. Vol. 5, No. 6 (November 2016). Bank margins and interest rates: Spain in the context of the euro area.

The author argues how initially the ECB's expansive monetary policy had a positive impact on profitability, but in contrast, the negative pressure on financial stability may also increase by maintaining interest rates. The article also shows the current situation of many European and Spanish banks where we see that low profitability is a common feature. To counteract the crisis, the ECB's expansive monetary policies have expanded its progressive adaptation to this challenge.

The author cites the case of Spain to explain how banks continue to set higher margins on corporate loans, but lower margins on loans for home purchases. Consequently, it informs us that in these economic policies, there has been a progressive decrease in the average income obtained by the outstanding loan portfolio, influenced by the high proportion of floating rate loans.

Complete article published by FUNCAS