Spain’s Central Bank Governor advises EU to prepare for bad debts

Pablo Hernández de Cos

Bank of Spain Governor Pablo Hernández de Cos Credit: European Central Bank

THE Governor of the Bank of Spain, Pablo Hernández de Cos has said that the European Union needs to take action now to be alert to the financial risks across the EU due to the Covid-19 pandemic.

He suggests that some form of deposit guarantee fund should be created as banks across the 27 member states are likely to see significant bad debts from individuals and companies due to the lack of earnings in 2020.

In addition, he advises commercial banks to prepare by cutting costs, becoming more efficient and increasing their use of new technology as Europe emerges from the restraints of the pandemic.

Many banks have taken sensible precautions by making provisions in their accounts for larger than forecast bad debts and Spain in particular has taken this on board having experienced and learnt from its serious financial difficulties caused by the last financial crisis.

He and other analysts think it unlikely that the Spanish economy will really start to recover until 2022 and the tourism sector which is so important to Spain will need to get back into gear before recovery takes off.

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Written by

John Smith

Married to Ophelia in Gibraltar in 1978, John has spent much of his life travelling on security print and minting business and visited every continent except Antarctica. Having retired several years ago, the couple moved to their house in Estepona and John became a regular news writer for the EWN Media Group taking particular interest in Finance, Gibraltar and Costa del Sol Social Scene. Currently he is acting as Editorial Consultant for the paper helping to shape its future development. Share your story with us by emailing, by calling +34 951 38 61 61 or by messaging our Facebook page