Ana Patricia Botín, president of Santander.
The president of Santander, Ana Botín, has ruled out that the collapses that occurred in March of some medium-sized banks in the United States and of Credit Suisse in Europe constitute a “systemic crisis”. Although the banking sector has come to be in the spotlight due to fears of a contagion effect, both supervisors and the entities themselves have been highlighting in recent months that European banks are perfectly equipped and that business models, geared towards retail customers, allow to avoid similar cases.
During an interview with ‘Bloomberg TV’, Botín stressed that “we are not in 2008″ and recalled that regulated global banks have much higher levels of capital than 15 years ago. In addition, he has stressed that many of the risks have shifted from the banking system to other actors, since banks now represent 38% of the financial system, compared to the 50% weight they had in the 2008 crisis.
Regarding interest rates, Botín has predicted that “stable or higher” levels can be expected in the future, since central banks have a “very narrow” path to follow to curb inflation and avoid a recession. “It is not easy to curb inflation with negative real interest rates”, pointed out the banker. Real interest rates are nominal interest rates (those set by central banks) minus the inflation rate. In this way, the positive real interest rate will only be reached when the rates set by central banks are higher than inflation. “If we don’t manage to stop inflation, it will become a huge obstacle to growth,” she stressed.
The European Central Bank implemented a 25 basis point rate hike at the beginning of May, up to 3.75%. This is the seventh rise in interest rates since July 2022. In contrast, inflation for the euro zone as a whole stood at 7% in April, and in Spain at 4.1%.
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