The European banking sector raises its voice against taxes on financial institutions. On the eve of the banking tax being voted on by the Congress of Deputies, the European Banking Federation (EBF) criticized this Wednesday that additional taxes on the banking sector become a “chronic political tool.” “, at a time when the eurozone needs to supply itself with investments to ensure its competitiveness.
“While international organizations such as the IMF and the ECB insist on strengthening the solvency and capacities of banks, these additional taxes represent a burden on the granting of credit,” the federation warned in a statement.
The EBF recalled that the additional tax narrative is not newand has already made a dent in the banking sector, hampering its ability to finance the economy.
Prudence to politicians
“What is worrying is that, although interest rates have been falling in Europe, the narrative for disproportionate taxes on banks is still alive in some European countries,” he warned. Along these lines, he has asked European politicians for “prudence” when designing tax reforms, ensuring that changes are made in accordance with “robust” impact assessments and public consultations.
The EBF’s pronouncement came after the ECB warned that persistent economic and geopolitical clouds continue to cloud the prospects for financial stability and growth in the eurozone. Faced with the risk of greater economic weakness, the institution chaired by Christine Lagarde stressed the need to have profitable banks that have adequate capital buffers and that ensure sound lending standards.
So far, financial markets have proven resilient in an uncertain environment, but Frankfurt already believes that “there is no room for complacency“and warns that the equity and corporate credit markets will be subject to greater volatility, as indicated yesterday by the vice president of the ECB, Luis de Guindos, in the presentation of the stability report.
“To preserve and strengthen the resilience of the financial system in the current uncertain macro-financial environment, it is advisable that macroprudential authorities maintain the current capital buffer requirements together with borrower-based measures that ensure sound lending standards,” the ECB said. .
High debt levels
After the rebound registered during the pandemic, the ratios between sovereign debt and Gross Domestic Product decreased. However, the Fiscal fundamentals remain weak in some euro area countries.
High debt levels and high budget deficits, together with low long-term growth potential and political uncertainty, increase the risk that budget slippages will revive market concerns about sovereign debt sustainability, Frankfurt warned.
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