Campa (EBA) ensures that the tax will not affect the solvency of banks
The president of the European Banking Authority (EBA), Jose Manual field, has referred to the special tax on banks during a breakfast organized by the Forum Europa. Campa has recognized that it has legitimacy in the sense that it has had the support of Parliament. Also, in his opinion, this tax will not affect the solvency of Spanish banks, although he has acknowledged that it will have an impact on results. “The tax will have a cost for the Spanish banks”, he has sentenced.
During his speech, has broken a spear in favor of the European financial system. The President of the EBA pointed out that, despite the macroeconomic context of economic uncertainty, with an economic crisis that is being managed, with a war at the door of Europe and a change in the economic policies of the central banks towards the normalization of rates, the starting point of the financial sector is good. In this sense, Campa has recalled that the capital ratio of european banks is goodbeing one of the highest in recent years, with high levels of liquidity also high.
“Provision policies continue to be prudent and bank profitability is recovering, with an average of 8% of own resources,” he asserted. However, Campa has indeed called on banks to be prudent, since, as a consequence of the difficult macro environment, he expects non-performing loans to rise this year.
Campa recalled that the EBA is about to launch the stress tests to publish them in July, “which will give a better view of how banks are in Europe.” In this regard, she recalled that these stress tests are not a prediction exercise, but trustworthy. Campa has defended his application since, as he has recalled, “they are of interest, in the sense that they are used by analysts, who download information and ask us questions about how they are built”. For Campa, these tests are intended to provide more information and try to anticipate those vulnerabilities. “In short, it is an exercise in solvency,” insists Campa.
Bonuses and dividends
The bankers salary and percentage of profit that the entities allocate to the dividend have also focused the intervention of the president of the EBA. Regarding the first, Campa has referred to a report that the institution published for the year 2021. According to the organization, the number of bankers with millionaire salaries is growing by 73%. Campa explained that this increase is influenced by two factors. The first, “because of Brexit, which brought bankers to Europe who were used to better salaries”, and on the other hand “the Covid pandemic, when many entities suspended the bonus”.
Campa has avoided going into assessments if this salary is high or not, since it is up to the shareholders of the entity to judge it. From our perspective, it is not that the banker earns a lot or a little, but that “this salary is in line with the entity’s risk profile, that is why there is a fixed part and a variable part”. As for the ‘pay out’ this should depend on the risks and projections of the bank of “how much money the bank needs and how much it can distribute. The logical thing would be that those banks that are more vulnerable do not distribute”.
During his speech, Campa mentioned crypto assets, which have many commercial uses, where it is very difficult to understand what their business is and that it is sustainable, therefore it is difficult to justify their assessments. For this reason, Campa has explained that the attitude of the regulator is one of prudence, of not recommending. Here Campa makes a distinction between those uses that are legitimate, such as with digital currencies.