A map of the Spanish financial system: A tool for analysing interconnectedness and stress transmission channels

Following the methodology in Andersen and Sánchez Serrano (2024), this article presents a map of the Spanish financial system as at June 2024. The study shows banks’ pivotal role in the Spanish economy, channelling savings from households into loans to the real economy. The non-bank financial sector, encompassing investment funds, money market funds, other financial institutions, pension funds and insurance corporations, appears to play a lesser role in Spain than in the euro area as a whole. One finding of the study refers to the role of the rest of the world in the Spanish economy, be it as investor in financial markets (it is the main investor in corporate and government bond markets and in listed shares) or as a channel for the investment of savings, mainly through investment fund shares. Looking at data for the International Investment Position, investment fund shares predominantly explain Spanish residents’ exposures to funds domiciled in Ireland and Luxembourg. Developing these maps is useful to understand interconnectedness and potential transmission channels of stress, whether originating inside the country or elsewhere.