The overflow of the debt crisis of the euro and the suspicions against Spain have taken a toll on the entities located in the country at the time out to seek funding. The largest banks and savings banks have been forced to pay attract more money then they lent to households and businesses. However, after having held the mortgages in the same price and assume this increase margins through business-that is, at the expense of reducing benefits, have begun to move in the first months of 2011 with loans. More expensive, incidentally, joined the rally in the Euribor for the same period.
Specifically, the supervisor estimated that between December 2010 and March 2011 interest rates of credit to households for house purchase rose between 49 and 70 basis points. If this increase is compounded by the increase in the Euribor, which he recalls the Bank of Spain is 50 basis points above December levels. Thus, overall, is a rising up to 1.2 percentage points above the interest charged by banks to the mortgage compared to December.
addition, according to the former central bank in its latest Economic Bulletin, can not rule out "further increases in the coming months, as the translation is" still incomplete. " Looking ahead, the development will depend on the financial market tensions and competition for deposits, among other factors. In any case, where no doubt, adds the document is that the increase is additional to the rise in the Euribor, which "Take some time to complete its transmission to the types of credit." Moreover, compared to developments by the mortgages, the Bank of Spain confirmed that the remaining loans had already moved higher costs to raise funds.
on what the wholesale market forecasts, the body chaired by Miguel Fernandez Ordonez said that after the damage occurred in the fourth quarter of 2010, English banks perceived some improvement in the conditions of access to finance. It also notes that the disparities within the sector at the time of access to markets "need to make their impact these costs in the asset is different. "" This could limit the one hand, the degree of translation in a competitive environment and, secondly, would increase pressure on the income of some institutions, "he says.
next to it, another drag on the results of the entities, in the opinion of the supervisor, high interest rates, of up to 4.5% - that offered by banks and deposits, which in turn is an alternative way to raise funds, avoiding the costs that they require in the wholesale markets. "The rising costs of liability has introduced a new element of pressure on the balance sheets of English credit institutions" says. However, the result from the point of view of who asks for credit, is the same: more expensive loans.
The rise of the conditions under which credit institutions granting the , says the Bank of Spain, turn coincides with lower demand, which is an added difficulty for banks and their margins without impacting costs customers, and stricter criteria for lending money. According to the findings of the Banking Survey released a few days, requests for financing of homes fell more than expected by financial institutions. Although this is extended to all Europe, added that the fall was "particularly marked in Spain, mostly in loans for house purchase.
For the Bank of Spain, the reverse says "probably to the disappearance of tax relief for this type of investment, and high average incomes, in early 2011, but also by the deterioration in consumer confidence .
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