Since the beginning of the health crisis, Spanish banks have demonstrated their responsibility to their clients by implementing various measures both independently and in collaboration with the authorities. One of their priorities was protecting the productive fabric, for which they made funds available to solvent companies affected by the pandemic, enabling a rapid return to normalcy as we overcome the virus.
For the first time since the global financial crisis, the volume of bank loans to the private sector increased in 2020, especially for companies. Data from 2021 continue to show an increase in total credit, both in loans and financing through debt issuance, although in a more moderate manner.
The latest European Central Bank (ECB) survey on SME access to finance for the first quarter of the year reflects what is currently the main concern of companies. At this time, companies are worried about uncertainty regarding the evolution of the pandemic and how it complicates their forecasts. European companies in general, and Spanish companies in particular, are concerned about revenue trends and finding an employee profile suited to their needs. Obtaining financing, however, does not appear to be a problem for them.
Another ECB survey, this time conducted among banks, shows that lending criteria for companies have remained stable in Spain compared to their tightening in Europe during the third quarter, as has been the case with corporate financing conditions. European banks expect an increase in demand for financing in the coming months, in line with economic improvement, and Spanish banks are prepared and willing to continue helping families and businesses as they have demonstrated during the pandemic.
The exceptional monetary expansion measures implemented by the ECB since the beginning of the crisis have been fundamental in reinforcing market stability and improving access to wholesale financing, and have proven effective thanks to banks, which have been the main financing channel for European companies, regardless of their size. It has become clear that the banking sector has been able to effectively pass on improved financing conditions to families and businesses.
Financial markets have also benefited from strong monetary expansion and other measures decided by central banks, which raises many questions about their reaction once these measures are withdrawn. Another troubling unknown is credit activity outside the banking channel. Although diversification in financing for companies and families is positive, its uncontrolled increase under inadequate supervision can ultimately damage financial stability, especially in those jurisdictions where lending activity is not reserved and can be carried out by individuals or legal entities other than credit institutions.
Official financial stability reports have been warning for many months about the vulnerability of wholesale markets as a potential risk that must be monitored. Even international authorities have requested on more than one occasion that the strict supervision and regulation that exists for banks be extended in some form to markets and other operators whose importance in corporate financing has grown strongly since the financial crisis.
At this still delicate time, banks are redoubling their efforts to maintain the financing required by the economy, according to objective and responsible criteria, so that the incipient economic recovery is built on solid foundations. Because our institutions are aware of the extent to which they can help reactivate the economy, doing what they have always done, but also channeling and complementing European funds so they reach all companies capable of contributing to modernizing the economy and making it greener and more digital.
José Luis Martínez Campuzano, Spokesperson for the Spanish Banking Association
