The president of the Supervisory Board of the European Central Bank (ECB), Andrea Enria, signed this Monday that banking taxes, such as those that exist in Spain, run the risk of “reducing the investor attractiveness” of the financial sector. since it “gives the impression” that if a bank makes profits, someone must “intervene.”
This would be because these taxes would be oriented, precisely, towards the margins obtained by the rate increase without taking into account the provision necessary to face them. However, Enria has acknowledged that banks may have “part of the responsibility” that these taxes exist due to their delay in passing on interest increases to their clients.
Banking supervision
On the other hand, Enria has stated that the ECB will remove the penalties for extra capital needs that some financial entities are subject to after having solved their leverage problems. However, the Italian has not given specific names and has noted that some banks will continue with these requirements “for some time to come.” He has also made it clear that he will “probably” require extra capital from more firms next year.
In this sense, the president of the ECB Supervisory Board has indicated that the annual bank review process (SREP) must “focus more on risk”, be more selective and not be so focused on the capital. This, however, does not have to translate into lower capital requirements, but rather more “qualitative measures”, which do not have to be “less demanding or less challenging” for banks than the existing ones.
Enria, as an example, has cited periodic fines that would come into effect if an entity does not timely remedy deficiencies detected by the supervisor in its accounts, or ‘cease and desist’ orders that limit the ability to carry out acquisitions if they do not remedy their management and governance problems.
