Escrivá urges bank rule simplification, digital euro push

Governor Escrivá highlighted findings from the Banco de España's Annual Report on Spanish productivity.

Until 2013, total factor productivity recorded negative growth, widening Spain's gap relative to the euro area by about 12 percentage points, partly due to inefficient bank credit allocation.

A notable shift occurred from 2013, with productivity growing positively, correcting roughly one-third of the accumulated gap.

This improvement stems from better capital and labour allocation across firms, with Spanish companies, especially SMEs, reducing indebtedness and increasing own funds.

Crucially, credit has been increasingly channelled to more productive firms, particularly microenterprises, reflecting a profound transformation in the Spanish banking system's credit origination processes.

This effort, supported by a sounder prudential framework, deserves recognition, though access to credit remains challenging for young or innovative firms without a credit history.

Governor Escrivá noted the banking system's enhanced soundness but criticized the regulatory framework's increasing density and complexity.

He clarified that simplification aims to eliminate overlaps, reduce low-value burdens, and improve clarity, not to deregulate or lower prudential requirements.

The Banco de España proposes streamlining capital buffers into microprudential and macroprudential categories, and simplifying the resolution framework.

Escrivá also called for better application of proportionality, adapting rules to institutional size, and reducing complexity from delegated acts.

He urged a clear push for simplification at the European level, covering legislation, standards, and reporting, to enhance predictability and reduce burdens.