(Adds quotes from BBVA chairman, details on ECB policy,
exposure of Spanish banks to Credit Suisse)
By Jesús Aguado and Vincent West
BILBAO/MADRID, Spain, March 17 (Reuters) - Recent market
turmoil could change expectations for the evolution of interest
rates, the chairman of Spanish lender BBVA Carlos
Torres said on Friday.
Bank stocks tumbled over the past week, spooked first by the
collapse of Silicon Valley Bank in the United States, then the
selloff in Credit Suisse , which only ended after the
Swiss National Bank provided a 50 billion Swiss franc ($54
billion) lifeline.
"The context of uncertainty will continue, both
geopolitically and financially, as a result of high inflation
and its possible second round effects, which may lead to higher
rates and for longer, although the more recent financial
volatility (...) has changed market expectations," Torres told
shareholders on Friday in Bilbao.
On Thursday, the European Central Bank stuck to a 50
basis-point hike, as promised at its previous meeting, and ECB
supervisors meeting on Friday saw no contagion to euro zone
banks from the market turmoil that has engulfed Credit Suisse
and some U.S. lenders, a source said.
However, investors held tight to bets that banking jitters
would rein in the ECB's ability to jack up borrowing costs in
the months ahead.
"In recent days we have seen sharp drops in the markets,
including our shares, triggered by the particular circumstances
of certain banks in the U.S. and Europe," Torres said.
Since the beginning of the market rout, BBVA shares have
fallen almost 15%.
Torres expressed optimism for 2023 despite the uncertainty
and market volatility.
Spanish banks have only a "residual" exposure to Credit
Suisse, Deputy Bank of Spain Governor Margarita Delgado said on
Thursday, as officials sought to underpin confidence in the
financial sector.
A source with knowledge of the matter previously told
Reuters that the total exposure in Spain was well below 1
billion euros ($1.1 billion), without elaborating.
(Reporting by Jesús Aguado and Vincent West; additional
reporting by Emma Pinedo; editing by Inti Landauro, Kirsten
Donovan)
Messaging: Reuters Messaging:
jesus.aguado.reuters.com@reuters.net))
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