The ECB warns that the banking tax may end up affecting customers

MADRIDThe European Central Bank (ECB), at the request of the Bank of Spain, has drawn up an opinion on the banking tax that the Spanish government wants to approve. In the opinion made public this Thursday, the ECB puts the magnifying glass on one of the elements that raised the most doubts about the fiscal figure announced by the government: can the bank be prevented from transferring the cost of the input tax to customers , no. According to the ECB, taking into account the current context of rising interest rates, inflation, as well as the deterioration of risk premiums, “it seems difficult to differentiate whether the temporary levy [a la banca] would be effectively passed on to customers or not.”

In addition, the body chaired by Christine Lagarde detects that in the rule presented by the executive “it is necessary to clarify” which verification mechanisms will be applied by the National Markets and Competition Commission (CNMC) to “guarantee” that the banking entities detail the customers the application of new costs. In fact, the ECB also recalls that banks can reflect in the prices of bank loans “all relevant costs, including tax considerations, where appropriate”. The supervisory body also assumes that those resulting from an increase in costs other than the temporary levy are “legitimate increases”; an increase in costs related to risk coverage, as well as adjustments to commercial margins.

At the same time, the ECB is quite critical of how the tax has been designed, in line with what the Bank of Spain had hinted at, which was precisely the one that asked the opinion of the European Central Bank . In particular, the ECB points out that it lacks elements such as a “comprehensive analysis of the possible negative consequences for the banking sector”, according to the text signed by President Christine Lagarde herself.

The supervisory body is missing an analysis detailing what impact the figure may have on the “profitability of the affected credit and financial institutions and the conditions of market competition”. In the eyes of the ECB, this analysis should serve to determine that the application of the tax “does not pose any risk to financial stability, the resilience of the banking sector and the granting of credit”.

The government maintains the plans

Government sources take iron out of the matter and remember that the ECB’s report “is not binding”. “The ECB does not issue an opinion against the tax, it makes recommendations and pronounces on technical aspects of the rule that it considers necessary to clarify.” “These are relevant considerations for any tax of this type that may be developed in another country. All were considered by the government before making the proposal,” added the same sources.

However, the Minister of Finance, María Jesús Montero, has stated that she will not change the banking tax despite the warnings of the European Central Bank. In statements in the corridors of Congress this Thursday afternoon, Montero responded that the text that creates it already states “that the cost cannot be passed on to customers.”

Precisely, this Thursday the Congress of Deputies voted the only amendment in its entirety presented on the banking and energy tax, which are processed side by side. The Spanish government had the support of its usual partners, ERC, the PNB and EH Bildu so that the amendment did not go ahead in its entirety and could therefore present partial amendments. The new tax figure was processed in the summer and the intention is that it will enter into force this year and begin to be collected from 2023. It would be a temporary measure because a priori it will only be in force for two years and the money collected they must serve the Spanish government to cover the economic expenses to deal with the consequences of the current price and energy crisis.