ECB’s seven blows to state bank tax

this European Central Bank (ECB) positioned itself against this Thursday. bank tax except surprise, to be confirmed end of this year. The Spanish Government plans to collect 3,000 million Euros in two years with this vehicle. The European banking supervisor is removing the harmful effects of this tax on the Spanish economy, in an opinion approved by the Governing Council. Seven are described below.

First, the body chaired by Christine Lagarde contradicts one of Pedro Sánchez Executive’s key propositions in approving this tax: net interest income tends to increase a greater effect as official interest rates increase”, as the weight of long-term loans decreases, this effect can be compensated Together lower loan volume with “stock portfolio losses Y increases in provisions As a result deterioration in the quality of the loan portfolio“.

Second, the ECB points to the detriment of jeopardizing the transfer of monetary policy measures to the EU. general economy through banks low profit Since the total income from interest and commissions is taken into account in the determination of temporary lien recipients, all these institutions can register. 2019. Subsequently, the banking supervisor gave this law a “comprehensive analysis of possible negative consequences For the banking sector, emphasizing the special impact of the advance tax on the profitability of credit institutions. the great uncertainty presented by the current economic environment and financial due to an increase in the provision for bank losses due to lower economic activity.

The ECB also temporary lien cannot be transferred to customers It reminds that “as well as operational and reputational risks,” it can also contribute to creating uncertainty, and also the consequences that Government policies may have on inflation: “Financial support measures should be taken to mitigate the effects of the rise in energy prices. temporarylimiting the risk of “feeding inflationary pressures”, increasing the efficiency of public expenditures and making public debt more sustainable.

Meanwhile, the auditor appeals to the Government and the government. Congress to do “Comprehensive analysis of possible negative consequences” of this tax“guarantee” that it is free of “risks” for financial stability, Durability the banking sector and granting a loanmay adversely affect real economic growth“.

The ECB is also focusing on the damage this has caused in Turkey. equal footing both in Spain and in the “whole banking union”, because imposing this tax only on Spanish banks could distort competition between banks. In addition, the ECB expects these credit institutions to take all these costs into account and reflect them in their loan prices. Finally, the supervisor points out that the Bank of Spain’s cooperation function to ensure that credit institutions comply with the “not transferring the amount of temporary liens to their customers” requirement contained in this draft law is unclear.

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