“You don’t know how a bank works”

The big banks have not spoken directly and officially about the tax of 3 billion in two years announced by Pedro Sánchez this Tuesday, but they did so, briefly, through their employers, AEB and CECA. However, the economists and analysts of certain entities have done so in a much more forceful and reasoned way through the YOUNGwhose president and vice-president are directors of Santander and Caixabank respectively and which has Jordi Gual on the advisory board.

The Spanish Institute of Financial Analysts published an “urgent note on the new banking tax” which, while it has gone unnoticed, is relevant both for what it says and for whom it represents. Moreover, he is severe: he accuses the Sánchez government of “absolutely ignoring the functioning of the income statement of a financial institution” for having wanted to take advantage of the supposed benefits of the rise in interest rates.

“The very fact of raising taxes on financial entities at a time like the present is very striking. But, above all, its justification is even more impressive”, assures the IEAF, since the notion of profits “coming from the sky” cannot apply to the bank, since to think that “a rise in rates generates real instantaneous profits », it is not known « not at all » to the sector.

The note continues with an obvious disregard for the arguments of the President of the Government: “Making the interest rate applied to loans equivalent to the price set by a hotel SME for its menu or an industry for its product lacks the slightest economic logic”. He explains that a bank’s income statement is different and “always arises from the difference between two prices: that charged to customers to lend money, and that paid to remunerate customer deposits”.

The association argues that the impact of the rate hikes will not be so great because they will also have to increase the remuneration of customers and because in recent years there has been a “profound change” in the balance of credits, in particular real estate loans, variable to fixed: “In one decade, variable rate debt has been reduced by nearly 20 points to reach 53% of the total, which drastically reduces customers’ exposure to rate increases.

“It is striking that they are raising taxes on banks at a time like the present. But, above all, his justification is even more impressive”


The IEAF’s second argument against the bank tax is that it punishes a sector that bears a greater tax burden: “The differential between the banking system and the rest of the companies has widened in recent years after the decision in 2015 to maintain the nominal rate. Business rate at 30% for credit institutions compared to the successive reductions in the general rate to 28% first and then to the current 25%. Thus, “the average effective rate applied to financial institutions amounts to 24.7% against a general average effective rate of 21.3%”.

Financial analysts say that initially, maintaining 30% of banking businesses could be justified “to maintain the volume of deferred tax assets (DTA) generated after years of losses, restructurings and bailouts of the Spanish financial system. up to 34,000 million euros”. , then “it was oriented as a punishment”, which he criticizes.

The document lists sector-specific taxes that others do not bear, such as tax on deposits, contribution to the Deposit Guarantee Fund and other differentiated regional and local charges. In addition, he believes that the government “takes advantage of the high degree of internationalization of the entities that maintain their headquarters in our country to obtain a higher net collection”.

As a final argument, financial analysts point to raising interest rates as “the most effective instrument to fight inflation”, while fiscal measures such as those planned by the PSOE executive and United We Can , such as “price controls, market interventions, cost subsidies and other similar measures not only do not help to curb inflation, but stimulate it”.

The banks, the ‘big four’ and the CEOE, at the IEAF

The Spanish Institute of Financial Analysts is a little known but important organization for banks and the financial sector. Its president is Lola Solanahead of Small Caps & ESG equity funds of Santander Asset Management Spain, manager of investment funds and pension schemes of Banco Santander, while one of its vice-presidents is Enric Fernández, chief economist of Caixabank Research, the center of studies of the Catalan bank. The other vice president is Marga Gabarró, CFO and COO of Zurich.

In addition to these entities, investment banks such as GVC Gaesco and Renta 4 also sit on the IEAF board, but they do not only represent the banking industry. Gregorio Izquierdo, Director General of the Institute of Financial Studies, the study department of the CEOE, is also a member of the association, which has in its territory of Galicia the former Secretaries of State Marta Fernández Currás and Irene Garrido .

There is no one missing from the IEAF Advisory Board. From BME, the stock market operator in Spain, to Fedea, through ACS, Telefónica, Uría Menéndez, KPMG, EY, IE Business School, Inverco and Unespa. However, Jordi Gual, former president of Caixabank and current president of Vidacaixa stands out.

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