The Bank of Spain (BdE) once processed sanctioning proceedings against the bank and its administration and management positions during the last year, affecting 54 individuals. This is three less than the previous year, in which almost 100 people were involved. The prudential area remains the area that concentrates the greatest volume, with a total of nine, the same as twelve months ago, of which six have already been resolved. All of them have been related to the internal control of the entities, focusing on risk management and governance, as well as maintaining the level of own resources to face the risks assumed and their possible disturbances.
The other two are associated with non-compliance with regulations on transparency and protection of banking clients within the framework of a few months in which “special attention” has been paid to the most vulnerable clients, as well as the control measures adopted by the entities. . to address the risk of fraud in the use of cards and in payments made through digital channels. In this sense, in terms of conduct supervision, the agency has carried out more than 150 supervisory actions focused on accounts, deposits, consumer loans, payment services and real estate credit.
As is usual, the BdE has carried out visits to bank branches with the aim of checking whether staff have sufficient knowledge of the new payment account regulations and transmit it clearly. In them they have detected a “positive evolution” in commercial practices, which could indicate an improvement in training. This is not the case in the segment of consumer credit establishments, in which the lack of knowledge among intermediate positions has been observed among the main weaknesses, as pointed out by the General Director of Supervision, Mercedes Olano, during the presentation. of said document.
In a context in which the pandemic crisis gave way to a scenario marked by geopolitical tensions as a result of the war in Ukraine, high inflation and rising interest rates, the supervisor’s attention from a microprudential prism, which is exercised within the scope of the Single Supervisory Mechanism (SSM), has focused on improving the resilience of the banking sector against macrofinancial shocks. But also in addressing structural vulnerabilities in governance, technological challenges and digitalization. Sustainability has also been another of the axes with the aim of adapting the business strategy to climate change. Looking ahead to 2024, it points in the same direction within the priorities stipulated by the European Central Bank (ECB) for 2024-2026.
Once the impact derived from the outbreak of the pandemic has been overcome, reaching higher levels of profitability and solvency, which is at historical highs after reaching 17% last September, the Bank of Spain highlights the resilience that banking has shown . . Low delinquency rates have also contributed to this, which, although it has increased slightly in loans for durable goods and mortgages, remains at low thresholds. However, they ask to be cautious. “The challenges for the future are not minor, including a possible deterioration in credit quality, potential increases in financing costs and increases in the risk premium that could lead to greater volatility in the markets,” they point out in the inform.
Starting from the fact that the main threat facing Spanish banks is the uncertainty surrounding the situation in the Middle East, the institution’s own governor, Pablo Hernández de Cos, insists in a letter included in the Supervision Report, that the ” Entities must be prepared for an eventual deterioration of credit portfolios” derived from the higher cost of debt service. Reason why he reiterates the need to increase the volume of provisions. After reviewing the near-term financial crisis experienced in the United States and Switzerland, in response to which the implementation of Basel III and the regulatory reforms implemented during the last decade made it possible to “reduce” the contagion effect, it has instantly accelerated the banking union process. “The next step should be the creation of a fully mutualized European deposit guarantee fund, which boosts the confidence of citizens and markets,” he emphasized.
