Since the last real estate and financial crisis that millions of people suffered, attention to the decisions and policies carried out by the European Central Bank (ECB) and the central banks of each member country have been the subject of greater interest on the part of Public opinion shows a growing awareness of the implications that its policies have on people’s daily lives. This monitoring of the actions of banking regulators must also be subject to scrutiny and control by the representatives elected by popular sovereignty, and this as part of their performance and work as servants for the citizens.
Under this premise of oversight, last September several deputies from the Plurinational Parliamentary Group Sumar filed a lawsuit before the National Court to force the Bank of Spain (BdE) to account for the information it has, bank by bank, on public money. which was transferred to them as interest for depositing their reserves in said institution in the years 2022 and 2023, and which had previously been denied by the BdE on the grounds that these data were subject to professional secrecy.
The importance of this demand before the Court lies in the usefulness of this detailed information to make a good design of the fiscal policy, for example, to adapt the temporary tax on banking that at the end of this year will have to be converted into permanent. The amount we are not referring to is not small, around 8,000 million euros were obtained by credit institutions in 2023 by leaving their liquidity in the BdE deposit facility. This represented 65% of the profits obtained by these banks in Spain, as well as a loss for the BdE itself.
It must be remembered that the income of 2,000 million that the BdE usually makes annually in the Treasury, from its profits, was reduced to zero last year, which translated into a significant impairment in the possibilities of financing public initiatives. It is a lot of money that should be under rigorous control since they are private banking profits that come from a transfer originating in the public sector. Likewise, this information would give transparency to the stock market and would be very useful for investors, since it is not equivalent when investing, a bank that obtains 65% of its profit from the deposit facility, than another in which that 65% of the profit is obtained from lending to households and companies.
The lawsuit filed against the BdE is based on rocky legal arguments, while the right to obtain information has been recognized internationally as a Fundamental Right, inherent and essential for freedom of expression; This is stated in article 42 of the Charter of Fundamental Rights of the EU, and in article 10 of the European Convention on Human Rights, in accordance with the jurisprudence of the European Court of Human Rights. Furthermore, at the national level, the Constitutional Court has repeatedly considered that the right of parliamentarians to obtain information is a legal right that is integrated into the content of article 23 of the Constitution and, therefore, constitutes a fundamental right. .
After the first negative response to the deputies, hiding behind professional secrecy, the BdE now asks the Court to dismiss the claim based on a letter sent by the all-powerful European Central Bank, in which it argues in a blunt and veiledly blasé tone. with the Spanish justice system, that monetary policy, to be effective, has to be opaque, that is, it has to be done in secret, despite being financed with public money. With its argument, the ECB would be giving this money the status of “reserved funds” to something that obviously does not have it.
This in turn conflicts with a basic principle of efficient markets, transparency. Perfect and symmetrical information for all participating agents ensures the effectiveness of the markets. Well, the ECB wants its monetary policy financed with public money to operate outside the economic theory of efficient markets. According to the ECB, for monetary policy to be effective, private investors, for example, have to operate with partial information, as do the public agents in charge of designing fiscal policy. Obviously this is nonsense. The ECB cannot base a policy as important as monetary policy on the secrecy and dissemination of the information with which the markets operate. This is neither solid nor coherent.
It is also a fallacy to maintain that providing information, bank to bank, about the transfer of public money they receive from the deposit facility would stigmatize it. Firstly, because the individual volume of this transfer can be approximated based on the size of each bank, several estimates have been published in this regard, without us knowing that this has dissuaded any entity from placing its liquidity in the facility. deposit.
Secondly, because there are already banks that publish this information in their reports, so the theory of stigmatization does not seem very solid. In this same sense, there are countries, such as the United Kingdom, that have requested this same information directly from the banks from their Parliament. Obtaining a positive response and without this having translated into a stigmatization of the Bank of England’s deposit facility.
And, thirdly, because even if it were true that revealing what was obtained by each bank would make monetary policy less effective, this would only mean that this instrument is not effective enough and that the ECB should resort to another one – or in combination with another – , for example, the regulation of the volume of credit.
Despite the forcefulness with which the BdE and the ECB present their arguments to deny the information, the prosecutor’s office of the National Court has expressed in a recent letter its favorable position to estimate the demand, and this despite knowing the writings of our central bank and that of the ECB. Thus, the Public Prosecutor’s Office criticizes that the contested BdE agreement does not sufficiently motivate its refusal to provide the requested information and is limited to “offering a formal justification with the invocation of affecting the ‘monetary policy-deposit facility’ and ‘professional secrecy’. ‘”, referring to European law regulations, when said regulations “do not regulate, prohibit or prevent banking information that could constitute professional secrecy from being provided to the deputies of national parliaments when it is collected in the exercise of their parliamentary functions. ”.
Furthermore, the prosecution recalls that “the fundamental rights guaranteed in the two sections of art. 23 CE embody the right of political participation in the democratic system enshrined in art. 1 EC and are the essential form of exercise of sovereignty by all citizens”, which is why it asks the Contentious-Administrative Chamber of the National Court to annul the resolution of the BdE because it represents a violation of fundamental rights of citizens, through their parliamentary representatives, to access and participate on equal terms in public affairs, functions and positions, in their functional aspect of access to information from public powers.
Obviously, we share the position of the prosecution and the well-founded support it has given to our claim, which is none other than to ensure the public interest. Now we only have to wait for the decision adopted by the National Court, which we understand must be fully in accordance with the principles of transparency and good government and subject to the interests of popular sovereignty.
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