Banking turmoil could impact global economy in coming quarters, Bank of Spain says

MADRID, March 22 (Reuters) - The Bank of Spain warned on Wednesday that uncertainty about the strength of the global financial system was likely to weigh on global economic growth in the coming quarters, although it could also potentially help ease inflationary pressures.

The central bank said in its quarterly economic outlook that the financial market turmoil triggered by the collapse of U.S. lender Silicon Valley Bank and the rescue of Credit Suisse had generated an adverse shock whose magnitude and persistence are still highly uncertain.

“In any event, it seems likely that the uncertainty that has already arisen regarding the strength of the international financial system will exert some adverse effect on the development of economic activity in the coming quarters and also contribute to weakening inflationary dynamics,” it said.

Reporting by Jesús Aguado, editing by Andrei Khalip