Bank of Spain sees significant risks to financial stability despite recent improvement

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.