These are interesting times we are living through. For the banking sector, because we are witnessing a return to a distorted interpretation of the past that ignores a fundamental fact: the banks that survived the crisis were those that did not need public assistance (because they were well managed), those that resolved the problems arising from the crisis with their shareholders’ resources, and those that, ultimately, had to take over unviable institutions, thus minimizing the very serious impact their collapse would have had on customers and the Spanish economy as a whole. <\/p>\n
Ten years after the crisis, the banking sector still faces significant challenges. The first, which encompasses all the others, is profitability, as we are still not adequately compensating our shareholders\u2014technically, ROE is below the cost of capital\u2014and if we do not, the consequences, in this sector as in any other, will be the same: our level of activity will decrease, the size of our balance sheet will shrink, and employment levels in our companies will fall. Among all these challenges, one stands out: our raw material, money, has no value in this environment of ultra-low interest rates. And while this is good news for our asset customers and for the State, which finances its debt very cheaply, it is not for banks and their depositors. But we also face other challenges: improving our solvency, our strength, addressing the digital challenge, and contributing, in the coming decade, to the transition toward a sustainable economic and energy model. <\/p>\n
In this context, I have no doubt that the best tax that can be applied to banking is to require it to strengthen its capital and solvency. To make it set aside more money\u2014capital and provisions\u2014so that when problems arise, it is not necessary to resort to taxpayer money. And so that when bad times come, families and businesses are not left without financing, precisely when they need it most. Without a doubt, that is the best possible tax. And it is the one that authorities around the world have been applying since the Great Global Recession broke out. As a result of these new requirements, Spanish banks today have between two and three times more capital than a decade ago, and between four and six times more if we include resolution capital, the MREL. To this is added the contribution our banks make to the Deposit Guarantee Fund and the newly created European Resolution Fund. In short, an enormous effort\u2014more than 30% of GDP in provisions for insolvencies alone\u2014that has been carried out in the midst of an unprecedented crisis in its severity and under the worst possible circumstances. Banks have made this effort because they understand what is required of them. And although the banking sector represents only 3% of production and corporate profits, its fundamental role in the proper functioning of the other 97% of the economy makes it deserving of special requirements and protection. Both are intended to safeguard the banking sector’s function\u2014as a credit provider, organizer of the payment system, and custodian of savings\u2014which is of vital importance to the economy, as was already evident during the Great Recession and the Euro crisis of 2011\/2012. <\/p>\n
In short, Spanish banks have strengthened their balance sheets and will continue to do so. Today, they are much more solvent, sound, and strong. But it must not be forgotten that they have just emerged from a complex situation and still have a path to travel in their capitalization and balance sheet cleanup process. And to do so, they need to make profits, to be profitable. Without profitability, there is no possible way to increase solvency. And that is, today, the sector’s primary objective and must also be that of the authorities as guarantors of financial stability and the proper functioning of the economy. Any decision that goes against that objective will interrupt the process that Spanish banks have been undertaking with such effort over the past ten years. I believe this is a good reason\u2014there are many others\u2014to ask the Government to rule out increasing the tax burden on the banking sector, whatever the tax instrument used. <\/p>\n
It is true that the Government, or rather, Spanish society faces the problem of how to guarantee the sustainability of our pension system. And banks want to contribute to its solution to the extent of their possibilities. Our institutions have already demonstrated that they are in solidarity with Spanish society\u2014there are many facts that support this\u2014but it is essential that each social or economic agent focus primarily on meeting its own responsibility. A society functions well when each sector, company, or citizen does well what it is supposed to do. It is simply about that. Taking on others’ responsibilities can only lead to two situations: neglecting one’s own obligations and leaving the problem one is trying to solve unresolved, simply because an inadequate path was chosen. <\/p>\n
At this time, our duty is to warn about the effects that some of the proposed tax measures may have in terms of competitiveness among banks, between them and emerging fintechs and bigtechs, and between Spain and Europe within the framework of the Banking Union. As well as to warn about the repercussions they could have on the solvency of banks and, ultimately, on the provision and price of credit and financial services offered to citizens. <\/p>\n
In conclusion, and returning to my initial idea, the best tax that can be applied to banks is to ask them to strengthen their resilience and solvency to be in a position to provide credit under good conditions and make life easier for their customers with the best possible products and services. In return, banks only ask that their strengthening process not be hindered and that an adequate solution be given to the pension problem in all its complexity. A problem that belongs to all of society and requires comprehensive solutions supported by broad political and social consensus. <\/p>\n