Uncertainty regarding the end of the pandemic has led monetary authorities to recommend caution to banks, with the aim of ensuring they continue to strengthen themselves as they have since the start of the crisis. Unlike other listed companies, banks are subject to specific regulations, both at the EU and Spanish levels, which are more advanced than those of standard corporate governance.
Banking is a disciplined sector that responds to extensive and highly demanding regulation, which has undergone many profound changes since the global financial crisis triggered in the United States in 2008.
Rapid adaptation to these requirements has allowed Spanish banks to significantly increase their solvency and resilience, thereby responding to the needs that have arisen with the outbreak of the pandemic.
Banks and their employees are effectively mitigating the impact on families, protecting the productive fabric, and collaborating with authorities in implementing essential measures such as financing through ICO loans or the payment of ERTEs. This support for society during the most difficult times has received public recognition from national and international authorities.
Banking activity takes place in a highly complex and changing environment marked by the economic situation, but especially by Covid, which has accelerated trends that were already becoming established.
Digitalization, the demographic challenge resulting from an aging population, and the energy transition are already integrated into the decision-making of entities. These are the keys to improving the economy over the coming years, and their relevance to our lives has multiplied following the experience of lockdown and interpersonal distancing measures.
In addition to the change in habits and customs of customers, who visit branches less frequently, banks operate in a low-profitability scenario resulting from low interest rates, further marked by high competition from large technology companies. These companies are free from the strict regulation and supervision of banking and lack its vocation for universal service regardless of the customer’s technological proficiency. To adapt to this environment, banks are carrying out the necessary structural adjustments—changes that supervisors have been demanding for some time and which are undertaken to continue playing a key role in the current difficult context. Their priority is to support families and businesses and to drive the post-Covid economic recovery we all desire, based on a new economic model that is better than the previous one, promotes environmental care, and is more beneficial for all layers of society.
José Luis Martínez Campuzano, Spokesperson for the Spanish Banking Association
