The Diplomat
The president of the European Banking Authority (EBA), José Manuel Campa, said yesterday that the banking sector foresees an increase in non-performing loans and in the risk profile of certain activities damaged by the Covid-19 crisis, as well as a restructuring process in certain economic activities.
In a digital meeting with members of the Business Council Alliance for Ibero-America (CEAPI), Campa said that, once the recovery has taken place, several actions will be considered, such as identifying the economic sectors that have been directly damaged and whose medium- and long-term viability is questionable.
“This requires an adjustment that we know is painful, with a component of restructuring of productive activity and with measures to support this transition to other economic activities,” he said.
He indicated that companies that have been affected, but still have viable business models, will have to be identified. These firms, he explained, will continue, but if they find themselves in situations of excessive leverage or debt, they will be required to undertake restructuring.
On the role of the banking sector during the crisis generated by Covid-19, Campa argues that the regulations generated after the 2008 financial crisis have allowed them to “continue to function relatively normally when the pandemic entered its most critical phase”, serving their customers and channelling some of the exceptional policies that have provided liquidity.
As for the challenges ahead, he raised low profitability, restructuring and digital transformation.
The chairman of the European Banking Authority was introduced by Carlos J. Villa, senior banker at Banco Santander, and the meeting, which was attended by around thirty CEAPI members, was moderated by Javier Vega de Seoane, chairman of DKV Seguros. Núria Vilanova, President of CEAPI, explained to the members the details of the 4th CEAPI Ibero-American Congress, which, under the title Transformation and Social Impact: the best companies for the planet, will bring together presidents of leading companies and business families from Ibero-America on 17 and 18 May.
