The Euribor has now been in negative territory for five months for the first time in history. What is traditional banking business like in an environment of negative rates?
The environment in which we are operating is exceptional and, as such, we hope it will not last long. I have defined what negative Euribor entails—charging savers and subsidizing those who request credit—as a “contra-God.” What I want to express is that we are in a historical contradiction; we must understand that this is not normal. Secondly, in a credit portfolio there will always be a probability of default and, therefore, a loss that the bank will have to cover with a final positive rate, even if the underlying interest rate of the entire portfolio is very low. In the mortgage portfolio, such cases are very limited, but even so, that is the normal functioning of banking.
José María Roldán, Chairman of the Spanish Banking Association
