The Bank of Spain does not want to participate in any real estate party, now that the debate about the need to reactivate the construction of apartments is back. His message to the Central Government and the banks is that he will not allow a relaxation in the conditions for granting mortgages, however low the credit debt of families and very high the need to improve access to housing .
“Credit risk will continue to be a supervisory priority for many years and under no circumstances will we allow the criteria for granting housing credit to be softened”, said yesterday the Director General of Supervision of the Bank of Spain, Mercedes Olano . The notice coincides with the housing construction plans favored by the Central Government and the launch of measures such as granting guarantees from the ICO to young people for 20% of the loan.
Olano made this warning during the presentation of the annual supervision report of the Bank of Spain. The institution is “relatively calm” with the current promoter and mortgage risk and sees “difficult” contagion from other countries where the mortgage market does generate tensions. However, he insists he will not let his guard down.
Last year, the Bank of Spain inspected three Spanish banks as part of a European campaign to detect risks in the real estate sector. The operation targeted almost twenty European entities and found several weaknesses in the euro zone. “In general, the Spanish entities have behaved well”, indicated Olano.
There are markets in Europe where the real estate sector is showing worrying signs after the rate hikes. One of them is the German one, from which Santander has decided to withdraw in search of more profitable businesses. It will cut 500 jobs in the country in three years, bringing the workforce to 3,600 workers.
The supervision report of the Bank of Spain numbers 19 on-site inspections of Spanish banks last year. Of this set, six focused on risks in the granting of credit, three on business models and two on technological weaknesses.
Attention is also being paid to the structure of deposits and the proliferation of cyber scams in which the identity of the bank is impersonated to obtain personal keys. Olano explained that, to determine whether there is fraud or not, the double authentication of payments is being taken as a criterion.
Bank of Spain supervisors are also closely watching the geopolitical situation after last weekend’s attack by Iran on Israel, which could affect the granting of credits. They analyze the banks’ technology supply chain, looking for Israeli companies whose services could fail due to a wider conflict in their country. Olano assured that, after studying this aspect, no risks have been detected.
