The President of the Spanish Banking Association (AEB), Miguel Mart\u00edn, stated today that Spanish banks are in a stronger and healthier position than their international competitors, which is enabling them to act as shock absorbers for the deep crisis in the Spanish economy.<\/p>\n
\u201cIn Spain, the banking sector has been the main asset, together with sound public finances, in cushioning the nonetheless deep slowdown of the Spanish economy in 2007 and 2008,\u201d said Miguel Mart\u00edn during his speech at a conference organized by the Socialist Parliamentary Group on the \u201cGlobal Economic Crisis.\u201d<\/p>\n
Unlike what has occurred in the United States and some European countries, where the crisis in their banking systems has ended up plunging the real economy into recession, in Spain it is the banks that are suffering the risks arising from the situation of the real economy. Among the macroeconomic risks facing the Spanish banking system, Miguel Mart\u00edn highlighted the profound imbalance in the real estate sector, the loss of competitiveness and, above all, Spain’s high external financing requirement, which is \u201csimply a reflection of the increase in the high level of household and corporate debt.\u201d <\/p>\n
The AEB President explained that until now the high solvency of Spanish banks has enabled the Spanish economy to meet its high financing requirement through the banking system.<\/p>\n
However, the debt level of the Spanish economy is not sustainable, so it \u201cis bound to reduce its overall debt level and its external financing requirement.\u201d In this context, \u201cthe banking sector will simply be the instrument through which that objective becomes possible or that need to reduce the high level of household and corporate debt materializes.\u201d In the view of the AEB President, the challenge for banks and for the Spanish economy is for this adjustment to be carried out \u201cgradually and in an orderly manner, with transparency and building for the future.\u201d In any case, he assured that \u201cthe solvency of Spanish banks is not limiting nor will it limit credit growth.\u201d <\/p>\n
Regarding the solvency of Spanish banks, he stated that \u201cthey are in a stronger and healthier position than those of many other countries,\u201d as demonstrated by the fact that \u201cno institution has failed despite the economic slowdown, nor has state intervention been necessary to strengthen their capital.\u201d He explained that provision reserves have allowed institutions to gain time and continue maintaining healthy profits and capital ratios. Mart\u00edn noted that the better situation of Spanish banks is due, as recognized by the International Monetary Fund, to three differentiating factors: solid prudential regulation, a strong business model, and prudent and conservative management by institutions. <\/p>\n
In addition to macroeconomic risks, Miguel Mart\u00edn explained that the Spanish banking system also faces risks arising from the measures adopted to resolve the crisis, measures that are producing \u201ca serious distortion of competition and fragmentation of the single financial market.\u201d In general, the measures adopted have been, in his opinion, \u201cdesigned and executed to suit each state; they are heterogeneous and lack all transparency.\u201d He was particularly critical of the recapitalization measures for European banks, which he described as \u201carbitrary and confusing\u201d to the point that \u201cthe European Commission has had to modify its criteria for assessing state aid\u201d in order to accommodate them. \u201cThey have been adopted without modifying European directives and are confusing in terms of their correct assessment and meaning, as well as arbitrary in terms of the level of capital required,\u201d he said. <\/p>\n
In this regard, he endorsed the recent recommendation of the International Monetary Fund which on January 29 stated that \u201cAuthorities must be transparent in their policies and in the use of support measures, especially in the conditions established for capital injections and in the level of capital that Authorities consider adequate.\u201d<\/p>\n
\u201cThe solvency of Spanish banks guarantees adequate credit supply to the economy.\u201d<\/p>\n","protected":false},"featured_media":0,"parent":0,"template":"","etiquetas-prensa":[868,920,805,917],"class_list":["post-38625","notas-de-prensa","type-notas-de-prensa","status-publish","hentry","etiquetas-prensa-credit","etiquetas-prensa-miguel-martin","etiquetas-prensa-results","etiquetas-prensa-solvency"],"yoast_head":"\n