The Government asks the Competition to study why banks do not pay for deposits

2023-06-29 20:19:42

The Government’s crusade so that banks begin to remunerate more for term deposits is intensifying. The economic vice president, Nadia Calviño, announced on Thursday that the Executive has requested from the National Commission for Markets and Competition (CNMC), together with the Bank of Spain, a study that identifies possible elements “that are limiting effective competition in this market.”

In other words, to analyze the reasons why the large entities continue without transferring the rise in interest rates to the savings of their clients, as they have already done with greater intensity, making loans more expensive.

After a meeting with the employers of the sector and different consumer associations, Calviño made it clear that they will go one step further and, after this analysis, they will assess “if any legislative change is necessary to be able to act in this area.”

Just a few days ago, the president of the CNMC, Cani Fernández, already expressed the need to have tools to investigate a possible situation of tacit collusion. In other words, that the banks have coordinated indirectly, through their own behavior in the market.

“It’s hard for me to think that there isn’t a bank that wants to win customers or increase its market share, unless one is placidly seeing that the others don’t either,” he assured.

The bank argues that the current excess of liquidity slows down that possibility. And he defends that they already offer alternatives to their clients, such as investment funds that, in turn, generate higher commission income. But from the Association of Financial Users (Asufin) they criticize that “the majority profile in our country wants products with guaranteed capital”, something that does not happen with the funds.

Code of Good Practices

To the discomfort of the sector, the controversy over deposits has crept into a meeting that was initially intended to analyze the new Code of Good Practices to alleviate the debt burden of variable-rate mortgages, which have seen a strong rise in the Euribor, which will close June above 4%, has made its shares notably more expensive.

The Ministry of Economy has proposed to the entities a plan to establish an automatic three-year extension on variable-rate mortgages intended for the acquisition of a first home, which would allow a reduction in installments. But Calviño has come face to face with the firm opposition of the Bank of Spain and the banks themselves to this possibility. Among other reasons, because the lengthening of the terms would also imply extending the term of household indebtedness. “They consider it premature,” explained the vice president.

The employers have been defending for weeks that “this is not the time to touch the code”, given the uncertainty that it could entail for debtors. So, given the reluctance to modify the current code to broaden the beneficiary base, both parties met in September to re-analyze the situation. But there are red lines that the body led by Pablo Hernández de Cos is not willing to cross.

So far, in the five months that have passed since the implementation of the plan, the entities have received 33,000 applications for adhesion to the aid, of which 19,000 correspond to the old code.

The figure has risen from the 9,000 that were recorded in March, but they are still far from the million families that were initially listed as possible beneficiaries of these measures, which include the freezing of quotas or the extension of maturities, as well as such as the free conversion of variable rate loans to fixed rates.

“The data is very provisional, because 40% of the applications are still being processed,” insisted Calviño. The Bank of Spain itself recently alluded to the fact that many households are using the savings generated in the pandemic to repay their loans. In these five months, according to Calviño, 29,000 mortgages have been refinanced, 139% more than in the same period of the previous year. Everything outside the code of good practices that the Executive, given the resistance of the sector, will have a very difficult time modifying.