The governor of the Bank of Spain, Pablo Hernándezde Cos, declined this Tuesday to comment on BBVA’s merger offer to Banco Sabadell, although he was in favor of analyzing what the optimal degree of banking concentration would be. “I cannot and should not comment on a potential transaction involving two significant entities. “We supervisors never talk about individual entities and I am not going to do so on this occasion,” said the governor about the attempted merger of BBVA, in what was his last appearance in Congress, since his term ends next June. .
However, Hernández de Cos has pointed out that it is evident that in the Spanish economy there has been an increase in the level of concentration, particularly in the banking sector, which “previously was below the European average and now exceeds it.” . In this context, he has considered that “it is a good time to pay attention to what the optimal level is.” “I don’t have an answer today, but I think it is important to analyze it. It is an issue that must be analyzed”, he stressed during his appearance, in response to the ERC spokesperson, Inés Granollers, who conveyed her “concern about the level of competition in the banking sector”.
The governor has responded that the level of competition is for the National Markets and Competition Commission (CNMC) to analyze and that what worries him is that the level of concentration is very high. He has also pointed out that to move towards a banking union, cross-border mergers would be one way to do it and that in that context the relevant market would no longer be exclusively the domestic one, so it would have to be incorporated into the analysis. For his part, Sumar’s spokesperson in the Economy Commission, Carlos Martín, has opined that, more than the concentration, what should be worrying is the “size” of the credit institutions in Spain, which he has considered an “anomaly.” ” in the EU, and has advocated putting a limit on that size as a percentage of GDP.
GDP revision upwards
In his last appearance before the Economy, Commerce and Digital Transformation Commission before leaving office, Hernández de Cos also announced that in June the entity will revise upward the growth projections of the Spanish economy, above 1.9%. current. The movement responds to the “better performance” of activity in the first quarter of the year and the good performance of employment, he explained. And he has insisted that the additional improvement in activity in the tourism sector also influences this increase.
The Governor went to the Lower House this Tuesday to present the Annual report of the entity corresponding to 2022 and 2023. His speech has drawn a favorable context for the Spanish economy due to the general reactivation of the European economy that is expected this year, the low probability that monetary policy will continue to tighten, population growth and the fiscal boost that is still received from the European Next Generation funds. However, there are also negative conditions, among which he has cited the slower pace of activity, the weakness of investment and the poor performance of productivity. Added to these is the persistence of a high structural deficit and high public debt, in a year in which community fiscal rules are once again in force.
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