In a speech at the Spanish Banking Association’s AEB Banking Meeting, Bank of Spain Governor José Luis Escrivá set out priorities for strengthening Europe’s financial autonomy and financing capacity, centred on developing the digital euro, streamlining the EU regulatory and supervisory framework without lowering prudential standards, and advancing the Savings and Investment Union agenda including a relaunch of securitisation. On payments, he argued Europe remains heavily dependent on non-European providers, citing that 72% of card payments rely on international networks and that related fees are estimated to have risen by around 35% over eight years, alongside the growing role of digital wallets such as Apple Pay (0.15% per transaction) and the potential expansion of dollar-denominated stablecoins. He positioned the digital euro as a complement to cash that could underpin private payment solutions and help complete the Single Euro Payments Area, while noting banking-sector concerns about holding limits and adaptation costs. For wholesale markets, he pointed to existing central bank digital currency functionality via TARGET infrastructure and described ongoing Eurosystem work on interoperability between distributed-ledger-based private platforms and TARGET services. On regulation, he cited stronger bank resilience since Basel III implementation in Europe, including an increase in the average Common Equity Tier 1 ratio from 6.4% (2011) to 14.5% and the leverage ratio from 2.7% to 5%, while calling for a holistic simplification of European rules, including level 2 and 3 standards, to reduce overlaps and assess whether supervisory guidance has exceeded legislative intent. He linked the financing agenda to Europe’s private investment gap, noting productive private investment of 12.3% of GDP in the euro area versus 15% in the United States and 27% in China, and highlighted the bank-centric model in which loans account for 92% of European firms’ indebtedness, alongside the monetary policy transmission from a 450 bp tightening cycle (July 2022 to September 2023) to a cumulative 150 bp cut in the deposit facility rate since June 2024, with new lending rates to firms falling to 4.1% by January 2025 and corporate loan growth returning to 2% year on year. He also flagged defence financing as a developing challenge, noting that in Spain credit to armament and ammunition manufacturing has not exceeded 0.1% of total bank lending over the past two decades, and argued that deeper capital markets and revived securitisation are needed to complement bank credit, proposing simpler and more proportionate EU securitisation transparency and investor due diligence requirements and supporting a European securitisation platform for standardised securitised bonds.
Bank of Spain 2025-03-14
Bank of Spain Governor Escrivá calls for digital euro, simpler EU rulebook and securitisation revival to finance Europe’s investment and defence needs
Bank of Spain Governor José Luis Escrivá, at the Spanish Banking Association’s AEB Banking Meeting, emphasized enhancing Europe’s financial autonomy, focusing on the digital euro, regulatory simplification, and the Savings and Investment Union agenda. He highlighted Europe's reliance on non-European payment providers and advocated for the digital euro as a complement to cash. Escrivá also called for simplified EU securitisation rules to bolster capital markets and address Europe's private investment gap.