The governor of the Bank of Spain, Pablo Hernández de Cos, warned today of the " context of deteriorating global macroeconomic ", which is still suffering from the legacy of the crisis in terms of high rates of unemployment and persistent levels of indebtedness".
this has been indicated during the opening of the third Annual Conference of Research of the Bank of Spain, in which he said that part of the worsening of the economic conditions is related to the trade tensions , in a context in which "puts into question the multilateral trading and financial system established since the end of the Second World War".
Hernández de Cos has warned that it will pose "important challenges" for the european economy by other global trends, such as digitalisation and climate change, although it has been prostrating himself "optimistic" about the future "common" of the EU, which has been shown to be "innovative and decisive" and there have been "breakthroughs" in relevant in recent years.
Among others, has cited the Single Supervisory Mechanism and Unique Mechanism of Resolution as the pillars of the Banking Union, and the creation of the European Stability Mechanism, which served to overcome the crisis, although it has been recognized that the framework still lacks some fundamental pieces".
european Agency of investmentthe governor of The banking supervisor national has claimed any type of investment agency european , through its creation or through an agency already existing in the euro zone, with the ability to issue bonds, since it would allow to get a approach to "optimal" fiscal policy and would give the economy "safer assets that would facilitate the functioning of the monetary policy, increasing the international role of the euro and completing the Banking Union and Capital Market".
In this regard, has pointed out that it is estimated the existence of around three billion dollars (2.7 trillion euros) of safe assets (government bonds with a rating of AA or higher or a private with a bad timing of AAA or higher), half the peak recorded in 2009 and lower than the $ 14 trillion (equivalent to 12.6 billion euros) calculated in the united States.
therefore, warns that the shortage of safe assets is "particularly serious" in the case of safe assets in eur , which "limits the options of diversification of the investors in the common currency of the euro area, in particular, the managers of international reserves, with the mandate to invest safely."
According to Hernández de Cos, the sovereign debt crisis has shown that "it is not enough to start from a situation of low level of debt and a budget surplus, as was the case of Spain in 2007."
banking Union and capital marketsThe governor of the Bank of Spain has insisted on the need to complete the Banking Union and to overcome the current "deadlock" in its third pillar: the European System of Deposit Insurance.
he Also sees "crucial" remove certain barriers and regulatory practices that hamper the emergence of a "true" european banking system.
In his opinion, another "priority" is a Capital Market "well developed and integrated in the EU", and a financial sector "truly cross-border", which would allow economic agents to smooth out the crisis of asymmetric national through a channel of credit strengthened.
In his opinion, a fiscal capacity, common in the euro area could contribute to addressing the crisis asymmetric country-specific and macroeconomic stabilisation.
Date Of Update: 16 September 2019, 22:00
