June 15, 2021

Guindos asks bankers for “moderation” with salaries and urges banks to act on their low profitability


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The vice president of European Central Bank (ECB), Luis de Guindos, asks the banks to act on their low profitability in the short term, “given the risks it entails for the financial stability of the euro countries”, while urging the bankers to ” moderate »their wages. This was the statement of the former Spanish Minister of Economy during a forum organized by Hey during noon.

On the controversy of Calviño’s statements on the high salaries of bank managers
in full wave of ERE
, de Guindos has pointed out that the limitation of bankers’ salaries “It’s a political decision” that governments have to take.

Regarding the danger of loss of profitability in the sector, the vice-president of the ECB assured that “if it remains in the coming years it could end up leading to an erosion of the capital base of European banks. You have to act now and you have to do it relatively quickly, “he added. Sour cherries.

In this sense, he also warned that corporate debt will cause a deterioration in the quality of bank assets due to the increase in the bad credits (NPL). Something, which he explained, still does not occur “because there is always a lag between the fall in gross domestic product (GDP) and the increase in NPL.

Because of this, from the ECB they project a “slow” recovery for the banking sector (around 3%) “when before the pandemic it reached 6%.”

The second in command in the ECB He also noted that they expect the European economy to return to pre-pandemic levels in the second half of 2022, although he warned that it will depend on the speed of vaccination.

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