The Spanish banks want the action mechanism in case of mass withdrawal of deposits prepared by the European Commission to offer enough liquidity to the entities to contain the blow. In these claims they agree with the ECB, which points to this variable, that of liquidity, as one of the elements of greatest concern after the Credit Suisse and Silicon Valley Bank (SVB) crises.
“Many times the problem that can be had is liquidity and not capital”, and “it is good” that the European Commission works in this line, assured yesterday the president of the Spanish Banking Association (AEB), Alejandra Kindelán, in reference to the new banking crisis management mechanisms that the European Commission will present this week.
ECB Vice President Luis de Guindos warned last week in Madrid of the risks of capital flight “at the click of a button” in a hypothetical banking panic scenario and alluded to additional liquidity measures such as the formula for respond to these tensions. Credit Suisse has received help with a line of 100 billion Swiss francs in case of need.
It calculates that Spanish banks are on average better positioned than European ones, with a ratio of 171%, which would give them the ability to face deposit outflows for longer, compared to 165% in the euro zone. In this calculation, 100% is equivalent to enduring 30 days without liquidity.
Spanish banks “have a stable and diversified deposit base. 66% of deposits are protected by the deposit guarantee fund”, stated Kindelán. The excess of capital compared to the requirements of the ECB stands at 60,000 million euros. “Spanish banks are among the banks that would destroy less capital in an adverse scenario,” he added.
Kindelán warned that credit will predictably suffer from restrictions due to the monetary policy of the ECB and anticipated that “excess liquidity” after the pandemic “will be drained in the coming months”.
The AEB welcomes the Central Government’s announcement that Sareb will put 50,000 affordable rental homes on the market and has recalled that Spanish banks have another 10,500 homes that they have been managing since 2012 with social criteria.
The banks are working with the municipalities in the bidding for ATM services in the 243 municipalities with more than 500 inhabitants without a bank presence. In places where no solution has been found, work will be done on a system of white-label ATMs operated by Redsys.
