Spanish financial markets and intermediaries

In recent years, the Banco de España Economic Bulletin has been paying increasing attention to Spanish financial markets and intermediaries. Clearly, they have always played a central role in the transmission mechanism of monetary policy decisions, both when these decisions were taken by the Banco de España and now that the Eurosystem determines the monetary policy for the euro area centrally. Also, the monitoring of financial markets and intermediaries is essential to promote the stability of the financial system (a function assigned to the Banco de España by statute) and to identify the degree of competitiveness of an industry whose relative weight in the Spanish economy is growing. The aim of this article is to give an overview of the main recent developments in the markets for financial products and services and of the behaviour of the main intermediaries acting in such markets. Given the notable changes in the Spanish financial system as a consequence of the start of Stage Three of EMU, and the data currently available, the analysis focuses on the first three quarters of 1999. The article is divided into two parts. Part 1 analyses the developments in financial markets, distinguishing between fixed-income, equity and derivative markets. For each market, the analysis focuses on the prices and the main developments in the primary and secondary markets. Part 2 analyses the behaviour of the main financial intermediaries, distinguishing between deposit money institutions and other important intermediaries, such as mutual funds, pension funds and insurance companies.