Five Days / If banks complained about the dire consequences for the sector to operate with interest rates near 0%, the new twist of Mario Draghi puts more pressure on financial institutions. The financial system thus provides a scenario of negative rates will last this year and next. That will have a direct correlation on the market and Euribor rates in general. The industry believes that the European Central Bank (ECB) will keep interest rates frozen at 0%-measured, among others, adopted Thursday- until 2018, which predicts a major complication for the management of banking margins.
One of the main, or rather, the core business of banking is lending, and within these the sale of mortgage takes the cake. But with the negative euríbor, entities face a bleak scenario, and “with a legal uncertainty becomes our worst enemy,” declared Friday a financial executive highlighted.
In his reflection, that is shared by much of the industry, operating with negative interest rates added to the income of banks hardly calculable pressure. But it considers that this operation could be offset by negative rising spreads on credit and especially mortgages. “Although the still existing price war to attract customers and business by certain entities complicate this possibility,” added the manager. Another alternative that banks have to compensate for this lower income stream margins as a result of negative interest rates is the rise in fees, or charging for services that were previously free-a recent example of new tariff it is applied now get cash from an ATM outside -.
Despite these routes, all unpopular, to compensate for operations with interest rates at 0% or negative, executives fear the reaction of judges before a possible complaint from a customer with a mortgage with a negative euríbor who would reclaim the charging of interest. In response, several banks are already shielding for not paying mortgaged by the fall in the Euribor. They are entering their mortgages zero clauses, which would not be forced to repay interest or, equivalently, to reduce share capital loaned to the debtor.
The response of banks is the same. “If finally reaches the end of having to pay for credit must be paid for deposits. It is logical. The world pointless,” reasons the number two of a known financial institution.
Another manager it goes further, and coincides with other colleagues. .. “There is much talk of the challenges of 2016 for banking, and draws interest rates to 0% as the main obstacle to the sector’s true that it is very important in Spain also another black point is added: political uncertainty, which is causing investors to park their investment projects pending that government is formed. But the worst, and what moves farther to the investor, is the legal uncertainty. you can not change the rules so why do so without considering the consequences, “criticizes the executive.
He says that in recent years the judges (and lawyers) have become” true legislators of banking “. Their complaint is in addition to another industry expert. “In these elections, all political parties are or will implement populist measures without considering the consequences. Someone has to explain that if the banks can not lend the economy suffers, someone has to explain that if the legislation is doubtful the investors do not want to enter the capital of financial institutions at a time in which the supervisory authorities are demanding more and more capital. what if a bank has no profit can not pay its shareholders, and if it falls it will have to pay small and large investors, in addition to the taxpayer. “
the head of the legal department of a large bank shares these views and added something else. “In addition to this legal uncertainty must be added the initiatives of individual politicians. The municipalities claiming tax the banks for deposits, charge for putting a cashier in the street, we fined for having flats unoccupied, you question when you change the commissions. We question everything, and we must understand that a bank is a business, it is a business as is any other. no one questions that a good copper barber four times more than an unknown hairdresser. If we fail to benefit mergers itself will be inevitable and the biggest loser will be the client. an oligopoly will be created and competition will disappear “, says the executive. He adds, “I do not think any client did not know what he signed when subscribed to a mortgage with clause floor. I do not believe the ignorance of all customers.”
Part of reason have, but only part. The judges, as ordinary citizens are chastened of abuses by some entities and some bankers. illegal actions carried out by the domes of certain entities, irregular marketing of products or the application of fees on basic services have now led to these new rules. We will have to seek balance.
Malas references PwC, KPMG and Deloitte on BPA is the largest financial scandal lived in Andorra. Two weeks ago the shareholders of BPA, the Cierco brothers, called for the suspension of the sale of the bank after removing the US Treasury on February 19 his performance against this entity. The US Treasury had accused BPA in March 2015 for alleged money laundering. Now a year later some experts believe that the measures taken against the Andorran entity were exorbitant, according to research. 240 customers BPA accounts have filed an administrative claim of liability by 370 million euros against Andorra and its agencies financial regulation and supervision. Last Tuesday, while a separate report by consultancy PwC on BPA determining that had 923 clients suspected of money laundering was published, representing 3% of the total and representing a turnover of about 1,000 million euros, 19% of the thickness of the Andorran bank. Given this damning report that overshadows the operation of Andorran bank, Cierco have said that “any claim PwC that BPA was an illegal business simply has no legitimate basis and is contrary to common sense” and asked to publicize the work of the consultant . The downside of these claims, according to several sources, is that other auditors also reached some negative conclusions about the business of BPA prior to his speech. This is the case of KPMG or Deloitte. KPMG already warned that since 2012 had “noted that the numbered Customers can sign contracts opening with the signing of the number of people without personal signature, increasing customer privacy,” something that was against the rules trend Andorra since 2009 to document increasingly the account holders to prevent laundering cases. KPMG, in paragraph 13 of its report “opinion of the auditing company and suggestions for improvement,” writes six pages of suggestions for improvement. A year later the Cierco replaced by Deloitte KPMG, who made a special report to the Financial Intelligence Unit, 2013. In the report’s letter opinion, the partner of the firm detected and narrated the absence of identification documents holders accounts in seven cases of the sample in 2012 and 2013. Deloitte also makes four pages of recommendations for improvements to BPA. PwC also can not do public work analyzes 37,000 accounts of 27,000 customers of BPA because it must safeguard the protection of customer data
SPAIN. The bank said that the legal uncertainty outperforms policy
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