We are facing an unprecedented health crisis that has led to an almost complete paralysis of economic activity. To overcome this painful and exceptional situation, it is essential that all of society gets involved. Each of us must respond according to our capabilities. Cooperation is also essential at an international level, as only then will we be able to find a cure for the disease, minimize its direct economic impact, and foster subsequent recovery.
Spanish banks are equipped to assist citizens during these challenging times. In recent years, they have significantly strengthened their capital levels, making them more resilient to adverse situations, and have accumulated liquidity that they are now making available to families and businesses in coordination with the authorities. Banks not only collaborate in the implementation of the various approved measures but have also complemented them with other initiatives to protect families and promote economic progress. This has always been their raison d’être, but in this context, it takes on even greater meaning.
Everyone’s priority is to ensure the survival of our industrial fabric. Businesses of all sizes need liquidity and financing now. State guarantees are essential for this. Otherwise, many companies would not obtain financing under traditional risk analysis patterns. Banks do not profit from these state guarantees; on the contrary, these could end up representing a very high cost for them, as they assume part of the losses that may be registered at a very complicated time for analyzing the solvency of companies. Spanish banks are acting with maximum speed, but always faithfully complying with the conditions established by the ICO for this type of credit.
The role of banks is fundamental in channeling financing to the productive sector. However, they must always do so responsibly and prudently, a principle that authorities always share and demand, both before and after the emergence of COVID-19. For this reason, the Government has made the granting of guarantees conditional on solvent companies that had no outstanding debts before the health crisis. In the current context, marked by an enormous demand for funds, it is crucial that authorities consider other types of solutions for those who cannot access bank financing, such as subsidies or public aid aimed at covering the losses that many companies are experiencing or may experience in the future as a result of this crisis.
It is difficult to make economic predictions at this time. First, we must overcome the state of alarm and gain more certainty about the evolution of the disease. But we must also be aware that the future we are trying to anticipate will be irremediably conditioned by the decisions made in the present. Banks are clear on this.
They know that taking the necessary measures at the right time is as important as implementing them responsibly, and that an exceptional situation requires an exceptional response. Everyone agrees that decisions must be swift and forceful, but also compatible with financial stability. Preserving it is essential to guarantee economic stability in the future. Otherwise, we run the risk of creating new problems when we are trying to solve them.
José Luis Martínez Campuzano, spokesperson for the Spanish Banking Association
