The member of the Executive Committee of the Central Europe Bank (ECB), Peter Praet, said on Wednesday that " the main problem is the lack of banking profitability" and how to achieve in an environment of low margins. Other bank representatives as MatÃ_as RodrÃ_guez Inciarte, vice president of Santander and Santiago Fernández de Lis, BBVA Research, agreed with the opinion of Praet. All participated in the presentation of the monograph " The Banking before the XXI Century", Institute of Economic Studies (IEE). Industry sources endorsed this idea and recalled that the average return on equity is lower than the cost of financing.
The credit crunch was not a big issue, but Inciarte admitted: " Credit growth is not enough to support economic growth."
According Praet, Spanish banks must make " profound reform " on the way facing the business, " as well as the governance and management of the risks." The ECB Governing Council later admitted that interrupted the financial crisis, but because there was "no adequate institutions. The United States does have and is a must for them to act quickly. "
In his view, Spain faces a " difficult situation " by low GDP and inflation at a time. Overall, Praet affected which is necessary to admit that there are " serious problems " to solve, as well as the importance of well-functioning institutions, something that has not happened so far.
In this regard, he stressed that the legislation will help change things, but warned that it must also change the way in which domestic banks work. "Reforms will be from each of the banks, must be an internal exercise, can not be imposed from above by the authorities," he said.
Also, he was " impressed" by the recent improvement in the economic environment in Spain, since it seems that the country has regained the confidence of international capital markets and no interest in the Spanish sovereign debt and equities banking sector " good signs of confidence."
Nevertheless, the executive director of the ECB stressed that Spain still faces a "difficult situation " because its growth is "weak" and inflation is below 1 %, far below the target of 2% makes the institution to price stability in the medium term.
In this vein, the president of the Institute of Economic Research (IIE), José Luis Feito, Praet that coincided with the intervention of reorganization and restructuring of the Spanish banking system " unduly delayed ", which has been "one of the biggest mistakes economic policy throughout our history. " In your opinion, have intervened so late made ​​the process more costly and irreparable harm existed and difficult problems that complicated the exit from the crisis and impeded the growth that could have been otherwise.
Furthermore, Inciarte said that the sector has suffered " a tremendous loss of confidence, which only recover with more transparency, simpler products and customer-focused management." Inciarte Rodriguez noted that " the approach of traditional commercial banking placing the customer at the heart of the strategy is now more relevant than ever," he said.
Moreover, the president of the Spanish Banking Association (AEB), Miguel Martin, closed the day and said they would be " happy if integrated " banks from boxes, ie, called a merger with the ECSC. He also stressed that the banking trends in the late twentieth century were not " sustainable" and the financial system grew in a " disproportionate " compared to the real economy.
In this context, he noted that the evolution of banking in the remainder of the twenty-first century will depend on how the global settings offered in response to a global financial crisis is over, how you end up solving the euro crisis and what happens in the environment economic.
In this sense, to be considered like growths prevent the twentieth century, trying to maintain financial stability " loaded " liberalization and innovation, the main factors behind the recent crisis. In his opinion, this happens to internalize the costs of the crisis to avoid excessive risk entities and are not " too big to fail." In the case of Europe, urged complete the banking union, and that would solve the problem of too big financial systems, without which you can not have a single monetary union. "To save the euro there is no choice but to follow this path," he added.
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