The First Vice President of the Government and Minister of Economy, Carlos Cuerpo, urged this Friday to safeguard the stability of the financial system and, at the same time, allow banking entities to maintain their capacity to compete.
During his participation in the conference "Competitiveness for Growth", organized by AEB, CECA, and UNACC, he detailed that "it is about simplifying by improving the current regulatory framework; the objective is not to deregulate," but to shore up the sector where pressure "is most intense," especially in corporate and investment banking.
Cuerpo remarked that "there are enormous financing needs" in an environment where the European banking market "remains too fragmented." He quantified these needs at 1.2 trillion euros annually, around 7% of the EU's GDP in investment each year, and in view of this panorama, he defended simplification and the strengthening of competitiveness.
To advance in this direction, in addition to greater flexibility in the regulatory framework, he advocated for a simplification that takes into account the diversity of existing banking models in Europe and that prevents capital requirements from being set strictly individually.
In this regard, he pointed out the importance of "discussing governance when making, strengthening, or anticipating changes in the regulatory environment and the ability to mobilize the necessary resources to advance this shared objective: growth."
Cuerpo also alluded to the upcoming negotiations in the European Council on the new Multiannual Financial Framework, which he said "is far from responding to these needs." "It is a framework that, if we discount the 'Next Generation' funds, keeps the European budget constant," he stressed.
In relation to this debate, he indicated that "alternative discussions" are being analyzed, some promoted by Spain, such as modifying the repayment schedule for the 'Next Generation' funds, which "would allow 'filling in' for traditional policies," or reinforcing the allocation of public resources in areas such as defense and security, in line with the SAFE defense package.
On the technological front, Cuerpo highlighted that banking "needs to incorporate innovations" without jeopardizing user trust in issues such as the payment system, the development of the digital euro, 'stablecoins', and protection against cyber threats.
He also recalled that four-fifths of productive investment is channeled through capital markets and that 10 trillion euros of savings are concentrated in household deposits.
"We need to reduce the fragmentation of liquidity," the minister concluded, after emphasizing that capital markets and investors need "a market with scale and a credible flow of profitable companies coming to the market," in reference to the negotiations on the Market Integration Package in the European Union.