The governor of the Bank of Spain, Miguel Ángel Fernández Ordóñez, believes it is now "essential" to keep up with the ambitious pace of reforms so as not to lose market confidence.

In a speech to the XVIII Finance convention organised by Deloitte and AVC, Fernández Ordóñez stressed in particular the importance of labour market reforms to move away from the current inflexible system that makes job creation difficult.

He warned that 2011 was going to be a difficult year for everyone, and for the banking sector especially.

The governor praised the new solvency rules for banks and savings banks and added that international investors' perception of Spain's banks had changed and urged the banks to seek foreign investment as soon as possible.  He also maintained that the Bank of Spain would keep obliging banks to provision against bad debts.

With regard to the situation in neighbouring Portugal having a negative effect upon the Spanish economy, Fernández Ordóñez said he foresaw few problems.

You Might Also Like :