New Banking tax: Imposition instead of collaboration

The Chair of the Spanish Banking Association (AEB), Alejandra Kindelán, published an article echoing one of the most repeated messages at the last Ecofin meeting in Prague: “we need strong and committed banks to support citizens and companies in these times of difficulty”. She considers that the best recipe in Spain to face this crisis is the constructive collaboration of the government, the financial sector and companies. In her opinion, by working together, we can provide effective responses and multiplying the benefits for society.

Article´s highlights:

• Commitment of the banking sector in Spain during the Covid crisis: The sector offered to its clients in difficulties moratoriums on mortgages and other loans, and paid in advanced pensions and unemployment benefits, in addition to being able to distribute loans partially guaranteed by the government for an amount of 140,000 million euros in record time to 750,000 companies.
  
  
• The banking tax - imposition instead of collaboration and negative effects on the economy: Collaboration with the public sector has been very intense and fruitful in expanding personalized attention to the elderly, reinforcing financial and digital education, and increasing financial inclusion through more access points to financial services in rural areas.
  For this reason, the imposition of a tax that eludes public consultation and all prior mandatory reports is striking and ineffective in fighting inflation, in addition to having negative effects on credit (50,000 million less according to sector estimates), on GDP and in employment (destruction of between 25,000 and 35,000 jobs). In addition, it increases legal uncertainty among investors and reduces the return for the 6 million retail shareholders who have part of their savings invested in the banking sector.