Jos\u00e9 Mar\u00eda Rold\u00e1n has been the president of the Spanish Banking Association (AEB) since 2014, a position he took after serving as the head of regulation and financial stability at the Bank of Spain. Known for his quick and forceful speech, he maintains that the social and political reproach directed at financial institutions is unjust and that, if judicial rulings regarding a lack of transparency with clients or regulations are applied retroactively, the effects will be “devastating.” Tens of billions of euros are at stake in litigation. “Times have changed and relationships with clients must also change,” he states. <\/p>\n
<\/strong>The mortgage market will have a new legal framework before the end of the year. How do you view this change?<\/strong><\/p>\n We need legal certainty, so anything that brings clarity is welcome. The Spanish mortgage system has functioned very reasonably compared to those of other countries in terms of costs and the availability of mortgages for broad segments of the population. Anything that removes uncertainty is welcome. <\/p>\n If it has been so reasonable, how do you explain the level of conflict?<\/strong><\/p>\n This must be seen in the context of a very deep crisis. What differentiated us as a country during the crisis is that the unemployment rate reached 27%. I would like to know if the German or French mortgage systems, which are often cited as examples, would have withstood such an intense crisis, with a default ratio that reached 6%. <\/p>\n And how does this strength relate to the legal uncertainty surrounding mortgages?<\/strong><\/p>\n In all countries, we have seen the role of banking being questioned. This is a dangerous doubt because the financing of the productive economy depends on the banking sector. If someone had told me years ago that the sector’s problems would center on the mortgage market, I wouldn’t have believed it, because my impression is that it is much better now. <\/p>\n Are mortgages then part of a broader problem?<\/strong><\/p>\n Times have changed and relationships with clients must be built on more transparent, solid, and much clearer foundations. It is the global trend and we must accept it. However, it is difficult for this new type of relationship to be proposed with poorly justified retroactive terms. Retroactive effects are very damaging to the viability of the sector. <\/p>\n But plaintiffs have already won retroactivity regarding floor clauses in the EU Court of Justice, the same court that must rule on this point regarding the IRPH, and quite possibly on the Stamp Duty (AJD). Should the criterion of systemic risk prevail over the nullity of a clause? <\/strong><\/p>\n In those two cases, we believe that nullity is not justified from a legal standpoint. We are talking, on one hand, about an official reference index, approved and published by the Bank of Spain, and on the other, about a change in regulations, which has nothing to do with the nullity of a contractual clause. It is obvious that a change in the law with retroactive effects would have devastating consequences on the legal certainty necessary for the normal development of economic activity in our country. <\/p>\n <\/strong>And do you believe there is sensitivity toward this problem in social, political, and judicial spheres?<\/strong><\/p>\n In judicial terms, I clearly have nothing to say. The third power is independent. In politics, there is more private sensitivity than public. And socially, there is no clear understanding that individual effects taken collectively have unintended consequences. In the end, what is the worst thing that can happen to a consumer? <\/p>\n Not having access to financing; I have been saying this for 15 years. Anything that jeopardizes credit at its current cost is detrimental in the short, medium, and long term. <\/p>\n Do you remember a time as complicated as the current one in the relationship between banks and their clientele?<\/strong><\/p>\n The difference is that this time the problem has come from the outside. Two months ago, we were complying with current legislation and a very well-established jurisprudence by the Supreme Court. In two months, we will comply with the new law. But in the midst of all this, the damage to the sector’s image has been tremendous without having done anything reproachful or rejectable. It is quite surprising. In other situations that I won’t go into, you could argue that perhaps we should have reacted differently. A great chaos has been created, and we have come out disadvantaged while always complying with the law. It’s not very rational, is it? <\/p>\n You have placed banks at the center of the political debate.<\/strong><\/p>\n The situation is what it is, let’s not kid ourselves. There is great political fragmentation and we are in a permanent campaign. When there aren’t European elections, there are regional or general ones… That explains something. But beyond this situation, which will last for many years, it must be said that the banking sector fulfills a fundamental mission: financing home purchases, SMEs, and the productive economy. We have a fundamental role to play in Spain. If Spanish banking has no future, Spain has no future; and that is not a threat, it is a fact we can corroborate when we see that the countries with the best growth are those with solvent, solid, and profitable banking systems. We should be grateful that we have a system that is not a problem, as it was in 2012 in all its harshness with the savings banks crisis. <\/p>\n Do you foresee parliamentary fragmentation for a long time?<\/strong><\/p>\n When you compare Spain with most countries that have a proportional system, you see they tend to have very diverse parliamentary spectrums. It is more complex and requires speaking with more operators. <\/p>\n Does Italy give you pause?<\/strong><\/p>\n We should rather learn to be Dutch. Or Danish, or Nordic\u2014Finnish, Swedish… who, with a very complex dynamic, maintain their competitive position. It’s about learning from the best examples. <\/p>\n Are you referring to the political parties?<\/strong><\/p>\n In political matters, if you’ll excuse me, I prefer to be Dutch or Finnish, but in others, I would have no doubts about my preferences.<\/p>\n Do you believe the Government is sensitive to your opinion on the importance of banking in the economy?<\/strong><\/p>\n Banks are also Spanish banks, with their Spanish shareholders\u2014two and a half million individual shareholders. We are part of Spain, the Spanish economy, and society. We compete in the Banking Union and we cannot take measures that distance us from that Banking Union. Let’s avoid measures that harm Spanish banking and not so much those of other countries that do not have these measures, because we would not be able to compete with full capabilities. <\/p>\n <\/strong>Do you think bank clients and taxpayers understand this message?<\/strong><\/p>\n Do you believe a foreign bank is going to maintain your financing when bad times come better than a Spanish bank? By foreign, I don’t mean foreign banks operating in Spain, but foreign banks operating in other European countries. A financial system that knows you as a client is better. And that applies to Spanish banking and to foreign banking operating in Spain. I don’t think that’s hard for the average citizen to understand. <\/p>\n <\/strong>Pardon me, but I’m not sure they agree.<\/strong><\/p>\n Has the euro been good for Spain? There have been complicated moments. You lose autonomy, you cede sovereignty… Spain has done very well when it has opened up to Europe and very poorly when it has closed itself off. But this is a package deal; it’s no use saying I like the euro but I don’t like the Banking Union, because without the Banking Union, the euro is not viable. The package requires giving up sovereignty and autonomy. Is it negative? No, because the package as a whole is still worth it. <\/p>\n <\/strong>Next Monday, the trial regarding Bankia begins. What do you expect? <\/strong><\/p>\n I do not comment on specific cases. But it strikes me when people say that in Spain no one has paid for their mistakes. There is not a single bad manager still in office in Spain. All those who did not know how to do it are out, and many of those who did not act properly are facing trial or are in prison. Spain is a country where justice has been as it should be: blind and tough. I am surprised that this is not taken into consideration. We are seeing that all this happens with significant time lags, but when I compare the situation with other countries like the US, I see that none of the executives of their large entities have gone through these types of processes. <\/p>\n <\/strong>Do you think that without Bankia, the sector’s reputation would be different?<\/strong><\/p>\n I don’t like counterfactual analysis. At this moment, there is no entity that has received public aid. And that can be extended into the past. <\/p>\n <\/strong>But it is the element that brings the debate on public banking to the fore.<\/strong><\/p>\n In Europe, there is no limitation on the public or private ownership of any company. Nor am I talking about individual entities, which on the other hand are managed with private profitability criteria. If we want to recover public aid, the best thing to do is management with private criteria in entities that can be privatized to recover those costs. Public banking in Europe has been more a source of problems than solutions. <\/p>\n Is the bank bailout the sector’s great debt?<\/strong><\/p>\n Not a single euro of the bailout was dedicated to banks. The crisis was one of savings banks because ownership was not well defined and incentives were misaligned. <\/p>\n <\/strong>In what sense?<\/strong><\/p>\n When it is not clear whether something is private or public, financial objectives get confused with regional or political ones, and private management strategies with personal ones. If incentives and ownership are clear, there may be errors, but the probability of them occurring is much lower. <\/p>\n <\/strong>But is there a possibility that the public money (54 billion euros) invested in the bailout will be recovered?<\/strong><\/p>\n I don’t know. People need to understand that the crisis had the causes it had. Banks were not the cause of that situation. The passage of time makes that false diagnosis more plausible, but the reality is what it is. <\/p>\n <\/strong>Under these circumstances, will banks repair their reputation?<\/strong><\/p>\n With a lot of patience and calm.<\/p>\n <\/strong>And to achieve this, must the banks or the clients change their position?<\/strong><\/p>\n Future times will demand much more. We are prepared to have new relationships with clients\u2014deeper, clearer ones. But we have to explain that without strong banking, there is no strong economy. <\/p>\n