A high level gathering took place in Madrid where European banking authorities and leading Spanish banks came together. As is customary for an annual meeting, the chairmen of the European Central Bank’s Single Supervisory Mechanism and the Single Resolution Mechanism, Claudia Buch from Germany and Dominique Laboureix from France, held a closed door session on Wednesday with the CEOs of Spain’s major banks and representatives from their trade bodies in the Bank of Spain building. One item firmly on the agenda was the government backed bank tax, confirmed by this publication. The government is examining how to make the levy permanent.
The levy contributed 1.214 billion euros to public coffers in 2023, and receipts are expected to grow this year thanks to stronger sector earnings. In November 2022 the ECB issued a non binding opinion questioning the tax just before Parliament approved it, a pattern repeated with other eurozone taxes. Nevertheless, the government and Parliament pressed ahead. Although the measure was originally intended to last only two years, the coalition agreement between PSOE and Sumar included plans to readapt and retain it.
Budget negotiations
Precisely the economic spokesperson for Sumar in Congress described as reasonable the idea of making the levy permanent through the state budget process this year, as a first step toward increasing it later. He noted that he had conveyed this position to the economy minister. Several financial sources report the minister has shown willingness to listen to sector views before extending the tax, while stressing that no formal negotiation is taking place and doubts persist that a fuller agreement will emerge.
The economy minister has not provided extensive details. He spoke of ongoing government analysis regarding structural or cyclical conditions and stated that based on this continuous review, the calibration and specification of the various measures would be decided, but not specifically to halt the financial tax. He said that moving forward, the aim is to maintain a fair contribution from the financial sector to the budgets and, in particular, to the social shield planned for 2024, the year the levy was extended.
Dense agenda
At the Madrid meeting, Buch and Laboureix also shared with bank chiefs their priorities for supervision and governance. They highlighted the need to review how the Supervisory Review and Evaluation Process operates, the sanctions framework, and the corporate governance guidance. They also outlined expectations for the ongoing operation of the resolution framework and emphasized strategies on environmental, social, and governance matters as well as cybersecurity that the banks should adopt.
The gathering served to discuss broader regulatory questions, including why European banks have lower market valuations compared to their American peers. They examined current European regulations, such as the slow progress toward a Single Deposit Guarantee Fund, and drew lessons from recent events including the U.S. regional bank crises and the collapse of Credit Suisse in recent times.
The exchange underscored a shared aim of reinforcing risk controls, enhancing resilience, and aligning European standards with evolving market expectations while keeping in view the lessons learned from global financial tensions.