“Absolutely” no risk of contagion at Spanish banks from Credit Suisse and SVB crises

by Lorraine Williamson
Credit Suisse

MADRID – There is “absolutely” no risk of contagion in Spanish banks as a result of the crisis at Credit Suisse. The bank has been in trouble for some time. The same applies to the fall of Silicon Valley Bank in the United States. 

This was assured by the president of the Spanish banking association, Alejandra Kindelán, during her speech at the New Economy Forum. She stressed that the situation of these entities “has nothing to do” with that of Spanish banks. With regard to the meeting of the European Central Bank (ECB), Kindelán believes that in view of inflation, more interest rate hikes are on the horizon. 

In Spain the “best banks in Europe” 

“I am more than ever convinced that in Spain we have the best banks in Europe and possibly in the world,” said the president of the banking association. She emphasised the entities’ customers, their capacity for innovation and the “sensitivity” to meet the country’s challenges. 

Volatility and uncertainty in the markets 

“There is absolutely no risk of contagion for Spanish banks. We have been hearing information from Credit Suisse for months, as a bank that was struggling,” Kindelán stressed. She pointed out Silicon Valley Bank (SVB) is a credit institution “and nothing to to do with those in Spain. 

“What is also true is that we are in a time of great volatility in the markets, with still a lot of uncertainty,” Kindelán continued. She was referring to the fact that all European stock markets and all banks on the continent fell in the last sessions gone through. 

With regard to the current situation, the Chairman has highlighted the differences between Spanish banks and the SVB as a clear retail company, which is highly exposed to “a range of companies with the same business model”. This left the bank poorly diversified in terms of deposits. In addition, the SVB had little credit on its balance sheet. 

“So neither on the liabilities (…) nor the assets side (…) can you make any kind of comparison here with our banks. It’s a different type of entity,” she added. 

Reassuring message from the government 

Finance Minister María Jesús Montero assured that the government is closely monitoring the crisis at Credit Suisse. She nevertheless wanted to send a message of calm. After all, since the previous crisis, the financial systems have been strengthened with supervisory mechanisms and stricter controls than before. 

In the same vein, the President of the Government, Pedro Sánchez, claimed this Wednesday that “the solvency and liquidity of Spanish banks is above the European average”. 

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