Banks have a duty to their customers to offer them the best possible service, at a fair and transparent price. This obligation of customer efficiency entails another of profitability for shareholders. Profitability as a counterpart to stability. Banks must continue to improve their profitability ratio. And to base this improvement on structural factors that make it sustainable over time. The ECB suggests several measures that can underpin this improvement in profitability: continuing with sector consolidation, greater cost efficiency, and through digitalisation. Also by accelerating the reduction of non-performing loans inherited from the crisis, although on this point Draghi himself has acknowledged that it would be essential for national authorities to create a favourable regulatory environment to effectively manage banks’ troubled assets.
European banks still have duties to fulfill. However, don’t the European authorities themselves also have duties? Starting with the ECB, which is reluctant to begin normalizing the extreme monetary measures applied in a critical economic and financial situation that has now been overcome. Or the rest of the European authorities, who must complete the banking union and also put an end to the regulatory uncertainty in which banks operate. Furthermore, regulators and supervisors also face the challenge of limiting the risks derived from the strong growth experienced in the last decade of official monetary expansion by markets and shadow banking.
In one of his last appearances, Mario Draghi stated that negative interest rates are not undermining bank profitability. The President of the ECB considered that the profitability of other businesses—such as asset revaluation—counteracted the deterioration of margins.
