De Guindos advocates a “gradual” withdrawal from stimuli and European bank mergers
Madrid, July 5 (EFE) .- European Central Bank (ECB) Vice-President Luis de Guindos advocates a “gradual” withdrawal of stimuli so as not to jeopardize the economic recovery after the coronavirus crisis and considers that it would be “very desirable” that there be European bank mergers.
The extraordinary measures adopted by the authorities have served to help the economy and business bankruptcies have been limited, as has the impact on unemployment, he stressed during his participation in a banking meeting organized by the ‘IESE and EY.
In addition, De Guindos pointed out that the banks, on this occasion, have helped contain the economic impact of the pandemic instead of exacerbating the problems and, in his words, they have weathered the situation rather well.
However, he insisted, entities continue to face the challenge of improving their profitability, which remains “clearly” below the cost of capital, which is why he considers it “essential” to remedy structural deficiencies that existed before the pandemic.
De Guindos recalled the overcapacity of the sector in Europe and the pressure on revenues due to competition between entities and the entry of new players.
For this reason, again, his recipe is for mergers as a way to solve problems, as this helps generate economies of scale and synergies, and although he recognizes that consolidation processes are easier to achieve. within the same country, it encourages operations.
“It would be very desirable if there were,” he added, as it would be a sign that there is a banking market in Europe, where there is already a single supervisor, although there is no still has no common guarantee fund.
This is an obstacle, but so is the divergence between countries on issues such as the regulation of insolvencies or the treatment of loan guarantees i.e. what happens in the event of default. , he stressed.
For De Guindos, it is “very natural” that the first wave of mergers should be national, but he considers that as long as there is no transnational merger operation, it is the difficulties of integration in the euro zone that will arise. draw.
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