The Bank of Spain published its 2024 Supervision Report, its annual account of supervisory and oversight work across microprudential supervision, macroprudential policy, conduct supervision and payment services. It reports improved profitability and strong aggregate solvency in stress tests, a decline in weighted-average Pillar 2 Requirements (P2R) set for 2025, and the first activation of the countercyclical capital buffer for exposures in Spain. Supervision-related work involved more than 900 professionals across seven directorates general, covering 186 credit institutions and a broader perimeter that includes payment service providers and other non-bank entities. For significant institutions, the Supervisory Review and Evaluation Process (SREP) resulted in 70 requirements and recommendations, 28% fewer than the prior year, and the weighted-average P2R for 2025 was set at 1.76%, down 7 basis points and below the Single Supervisory Mechanism average of 2.1% for significant institutions. Work also included targeted and horizontal reviews and 21 onsite inspections plus 13 internal model investigations, as well as participation in a thematic cyber-resilience stress test. For less significant institutions, the weighted-average P2R for 2025 was 1.72%, down 8 basis points, with 483 ongoing supervisory actions over less significant institutions and the Instituto de Crédito Oficial, 11 onsite inspections initiated, and 528 requirements and recommendations focusing mainly on governance, capital, operational risk and business model. Macroprudentially, a new framework for setting the countercyclical capital buffer targets 1%, and the buffer was set at 0.5% in October 2024, to become binding in October 2025, alongside the setting of capital buffers for four domestically systemically important institutions, one of which is also global. In conduct supervision, the report describes a shift toward more preventive and proactive supervision, with 85 supervisory actions covering 665 supervised subjects and 145 supervisory measures, plus extensive work on customer service department arrangements. Independent experts conducted an external assessment of the Bank of Spain’s conduct supervision function in 2024, leading to an action plan for 2024–2025. Priorities for 2025 include credit, liquidity and interest rate risk, governance and data quality, climate risk, and digitalisation and technology risk, while the countercyclical buffer set in October 2024 will apply from October 2025.

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