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The Spanish financial system

Spain has a modern diversified financial system which is competitive and fully integrated with the international financial markets.

In Spain, as well as in the European Union, the deregulation of capital movements is complete, which enables the Spanish companies to obtain financing from abroad, as well as it makes investment much easier for foreign companies in Spain. The highest degree of integration at the European Union had a great impact in the Spanish economy, especially in the banking and the securities market sectors.

The Spanish markets are endowed with great transparency, liquidity and efficacy.

Even though the economic and financial slowdown had a great impact on the stock markets worldwide, the Spanish financial system has undergone significant restructuring process that have implied a reorganization of the annual accounts and solvency of the main actors of the stock markets. By way of example, the major Spanish credit institutions are becoming global leaders of the banking technological transformation.

In what concerns the economic growth, the European Central Bank maintained that the Spanish economy is registering a solid economic growth which is consolidating the restructuring process of the financial markets. This rise in the Spanish economy continued in 2019, driven by positive figures for private consumption, foreign investment and tourism.

Notwithstanding the slowdown in the world economy caused by the COVID-19 pandemic, the Spanish economy grew by 4.9% in 2021 and is expected to grow by 5.8% in 2022, according to data from the International Monetary Fund.

As for the money market, this has become increasingly important as a result of the deregulation and greater flexibility of the Spanish financial system as a whole in the past few years, with a substantial volume of trading in money market instruments.

Lastly, more general and stronger protection for financial services customers has been provided. A stronger protection of the financial systems has also been provided through the regulation of obligations and procedures to prevent the use of said systems for money laundering and terrorist financing.

All these and other aspects of interest, such as the tax regime applicable to the main financial products available on the Spanish market are discussed in this chapter.