The OECD recommends that the Spanish banks continue to limit … – Expansión.com

The OECD recommends that the Spanish banks continue to limit … – Expansión.com

The OECD considers that the Spanish banks are “well positioned” in the face of European stress test, but calls for the continuing restrictions on the dividend to ensure solvency.

The Organization for Economic Cooperation and Development (OECD) recognizes, in the biennial report on the Spanish economy published today, the important advances that have made Spanish banks after the long process of restructuring. The agency believes that the entities are well prepared to overcome the stress tests being carried out by the European Central Bank (ECB) before assuming the only oversight of the financial sector in the euro area.

However, OECD points out that banking is not without risks, mainly by the economic environment, the significant amount of public debt to its balance sheet and over-reliance on ECB funding.

For this reason, the report recommends banks to maintain a dividend policy of containment, beyond the end of 2014 should be recalled that the Bank of Spain in 2013 recommended the sector to limit the cash payment to shareholders to 25% of income and then expanded the recommendation to this exercise.

The OECD emphasizes that the quality of bank balance will depend on the evolution of loans dudodos which, in turn, depend on the evolution of the macroeconomic environment.