The Bank of Spain said on Thursday that significant risks to financial stability remain due to COVID-19 despite the recent economic improvement, as reported by Reuters.
Additional takeaways
“Banks should maintain or increase provisions depending on the efficiency of support measures and economic setting.”
“Seeing a very likely and significant rise in bad loans in coming quarters.”
“NPL ratios could rise in coming months, especially among sectors most affected by COVID-19.”
Market reaction
This headline doesn’t seem to be having a significant impact on the shared currency’s performance against its rivals. As of writing, the EUR/USD pair was flat on the day at 1.2122.
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