The Congress of the Deputies has approved this Thursday the report on the investigation of the financial crisis, the bank rescue and the bankruptcy of the savings banks. A document, which after a year and a half of work has been supported by all the parliamentary groups except for Unidos Podemos and Ciudadanos. The former has abstained because he wanted the text to have been more severe, and those of Albert Rivera, who has voted against, for his discrepancies in relation to the politicization he blames for the fall of the savings banks.
The parliamentary groups consider that the Bank of Spain and the other supervisory bodies "did not meet their obligations" to act against the housing and credit bubbles. They also blame the managers. In particular, in the case of Bankia, they say that they carried out "accredited practices as criminals in the remuneration system of their leaders", and that these were the product, among other things, of "highly defective governance" in the entity.
The conclusions of the parliamentary commission have gained special relevance after it has been known that the Bank of Spain takes for granted, for the time being, more than 42,000 million of taxpayers, an invoice that has raised the public debt. Among the conclusions and proposals of the opinion highlight those that refer to the profound reform of the supervisory bodies.
Thus, the Government is proposed "to adopt measures to ensure the effectiveness and independence of the solvency, market, accounting and auditing and resolution supervisors, ensuring that there is no conflict of interest in the exercise of their functions or coincidences of members in their governing bodies. "
Effective and transparent supervision
In addition, the Executive is requested "to initiate a process of formalization of procedures to be followed by supervisors that ensure their effectiveness and transparency, without the need for new investigative commissions to understand the role of each one of them". The parties agree that the existing supervision model for credit institutions and banking products (Banco de España), securities markets and investment services (CNMV) and insurance companies and pension funds (Directorate-General for Insurance and Pension Funds), "generates many inefficiencies, conflicts and regulatory arbitrage, since the main agents that intervene in the markets are entities that operate simultaneously in the three subsectors".
To minimize or eliminate these problems, it is proposed to advocate "the functional supervision model, known as twin peaks, that have already adopted some of the surrounding countries. This model articulates the supervision of two institutions, a supervisory entity for the solvency of all financial entities and another one responsible for supervising the rules of conduct. "This model was claimed in 2016 by economist Fernando Restoy, who plays the role President of the Financial Stability Institute since January 1, 2017, and was included in the PP program, however, caused a radical criticism of the Ministry of Economy, led then by Luis de Guindos.
Client protection authority
The parties have agreed to request the "creation of a financial client protection authority." There is a legal commitment to constitute an authority for the out-of-court settlement of litigation in financial matters, encompassing and perfecting the tasks currently performed by the Bank's claims services. Spain, the CNMV and the General Directorate of Insurance and Pension Funds Improving the protection of financial customers, particularly retailers, is one of the main pending challenges, "the report concludes.
The Commission that made this report also stops at some detail, such as asking that the heads of the three supervisory bodies do not overlap in the different councils to avoid conflicts of interest. It also requests that the European Single Resolution Board (JUR) inject liquidity before intervening a bank, something that did not happen in the case of Banco Popular.
On the other hand, the text considers "essential to improve the image and reputation of the sector, very affected as a result of the crisis." The survival of any sector depends on the society that wants it to exist, that understands that it is useful. very disappointed thinking that the crisis we have experienced, and that has meant the decline in the living standards of many people, is due to the behavior of bankers. "
He also believes "essential to rebuild the relationship of trust with customers, putting them always at the center of all decisions, making a continuous effort to improve transparency and make products simpler, but also promoting financial education, which allows people to take more informed decisions, and giving personalized tools and practical recommendations. "
In the session of this Thursday, the commission has approved the report that is an account of the research carried out with citations and data from the documents provided by each of the parliamentary groups.
Look for another side
In addition to this document, the commission of inquiry has approved a background block that included a list of the documents requested during the parliamentary work and the list of respondents requested, both those who finally came to explain, and those who did not. they did it.
The report concludes that during the crisis, the supervisor, both under the control of Jaime Caruana (2000-2006) and Miguel Ángel Fernández Ordóñez (2006-2012), He looked the other way, something that inspectors have always accused him of. "There were tools available" to act on behalf of the Bank of Spain, but that these "were not used for lack of political will". The document also charges the supervisor in his management of the preferred ones, since he believes that this "encouraged" their sale despite having "proof of aversion to these products by institutional investors."
In addition to supervisors and the financial sector, the report also points to the governments of Felipe González and José María Aznar for the approval of different laws. The former popular president is accused of the land law, which "favored the increase of available urban land." And to the socialist, the regulation of securitization funds, which allowed the credits not to appear in the entities' accounts and thus not assume the risk.
"The regulatory system in force at that time created the favorable framework for hyper-growth and hyper-financing of the real estate and construction business," reads the document, in which the commission rejects the crisis arising "because citizens lived beyond their means." "It was the financial entities that lent far beyond their capabilities, and it was the regulators and supervisors that worked far below their responsibilities," he says.
Between 2000 and 2008, credit to the construction and promotion sector increased by 661% and mortgage credit by 335%. 63% of all credit to the private sector was concentrated in real estate activities.
"Bad practices in banks and savings banks"
The report also underlines that "bad practices are widespread throughout the sector, including banks and savings banks" and that the crisis "affected banks and savings banks alike", although, the text adds, "the resolution of the associated problems It was not the same in either case. "
"The failure of the banks can not conclude the success of the banks, the latter saved their international diversification, while in Spain they also experienced difficulties and punctual aid", abounds the report, which exemplifies the growing weight of international business in the two largest entities, Banco Santander and BBVA.
Regarding the different management models, governance and a possible politicization of the entities, the report states that "erroneous decisions are made by individuals or groups of people, regardless of their profession or affiliation", and also the existence of "incentives" perverse ones that promote the wrong decision making ".
Particular errors and politicization
One of the most controversial points has been the determination of the culpability of the crisis of the savings banks. This point has led to the vote against Citizens, which considers the PP and PSOE guilty of politicization and poor management of the boxes. The report states that "what is behind the bad practices that occurred in many credit institutions, both banks and savings banks, are certain groups of very specific people with particular motivations and interests", and denies that the different Ownership of banks with respect to banks has been "a determining factor in their different exposure to the crisis".
On the other hand, he argues that "the professionalism of senior managers of savings banks was similar to that of the management boards of banks." "The assumption of bad practices and erroneous decision-making did not depend, therefore, on the level of training, but on other motivations and inertias," he stresses.
In this sense, it attributes the bad practices in the sector to the search of improvements in the income statement "in a growing and continuous way" and to the "establishment of remuneration systems and incentives linked to the achievement of objectives". A bet that, in his opinion, "promotes a short-term vision of management and a neglect of taking into account other criteria related to the assumption of risk, ethics or the sustainability of the system itself".