The president of the institution, José Manuel Campa, assures that the entities are ready to take on the burden despite the foreseeable impact on the results
The President of the European Banking Authority (EBA), José Manuel Campa, this Monday defended the legitimacy of the government-approved bank tax and those entities will start paying from February, affecting 4.8% of their income in interest margin and net commissions .
“The legitimacy has a full justification, and that is clearly Parliament, which voted for it,” Campa explained during a speech at Forum Europe. In his view, Spanish entities are perfectly prepared to take on the tax, so it is not expected to have a net impact on solvency ratios, despite the realization that there will be a cost to the industry.
The forum was also attended by economic vice president Nadia Calviño, who defended the tax at a time when the sector is benefiting from the rise in interest rates and the salaries of the country’s bankers have risen again.
The EBA itself released a report last week pointing out that the number of bankers in Spain earning more than a million euros a year will increase by 73% by 2021. For Campa, “it’s not supposed to be if they earn a lot or a little, because that debate should be between the entities and their shareholders.
In this sense, he defended that the remuneration of the executives of the sector should be in line with the risk profile of their banks, in accordance with the structure of these salaries (which part is fixed, which variable, study the possibility that the bonuses paid in be taken into account if the objectives are met, they have to be returned if the opposite happens, etc.). “Everything should be determined by the efficiency of the entity, the capacity of the managers and with the aim that no income is diverted to the detriment of the shareholder,” he stressed.
Similarly, he recalled that the data in the report corresponds to a year in which salaries increased due to two determining factors. Firstly, due to the effect of Brexit and the arrival of better-paid British bankers. Second, because of the return of variable remuneration, which was abolished in 2020 to deal with the impact of the pandemic.
Regarding whether the entities are overly optimistic with the macro environment, Campa acknowledged that the industry is telling the EBA that larger allocations are not necessary given the tight control they maintain over delinquencies. However, he warned that “the macro environment is very uncertain,” which is why they continue to ask banks to be cautious about provisioning.
“The macroeconomic context is the biggest challenge we face; It is the framework that will mark the evolution of the sector, with the war in Ukraine and a normalization of monetary policy that has an impact at a good time, but that leads us to a situation that we have not had for more than a year seen ten years,” Campa emphasized during his speech.
In any case, he stressed the strength of European entities to rise to this challenge, with capital, liquidity and profitability ratios sufficiently resilient to the crisis.
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
