The Bank of Spain has announced that it is raising by 0.25 percentage points (pp) the minimum capital buffer that Banco Santander and BBVA must have as systemic institutions, while maintaining the requirements for CaixaBank and Banco Sabadell, which are in the same category.
The supervisor explains in a statement that this increase in macroprudential requirements for banks is motivated by the review of the ECB’s methodological framework on minimum buffers for systemic institutions in the context of the Single Supervisory Mechanism.
The identification and setting of capital buffers for systemic institutions is a macro-prudential instrument that aims to strengthen the solvency of these banks and thereby mitigate any adverse systemic effects they may have on the financial system.
The capital buffer is also conceived as a requirement to offset the possible competitive advantage of these institutions in the funding markets – compared with smaller institutions – and to encourage prudent risk-taking.
The four large Spanish banks: Santander, BBVA, CaixaBank and Sabadell remain in the systemic banking category.
The designations of systemically important institutions are reviewed every year and on this occasion the Bank of Spain has once again decided to keep the four large Spanish banks in this category: Santander, BBVA, CaixaBank and Sabadell.
Santander remains the only Spanish bank to be considered a Global Systemically Important Entity in 2024, which obliges it to hold a capital buffer of 1.25% of its total risk exposure, higher than the rest, and 0.25 percentage points higher than required until now.
In the case of BBVA, the Bank of Spain also raises its capital requirement by 0.25 percentage points, but in this case to 1%.
It will be sufficient for CaixaBank to continue to have a minimum buffer of 0.50 %, and for Sabadell 0.25 %.