The Vice President of the European Central Bank, Vítor Constâncio, reflects on the challenges facing the banking sector at a lecture organized by the Master's Degree of Banking and Financial Regulation of the School of Economics of the University of Navarra.

At the event, "European Banking Industry: What's Next?", Constâncio proposed "a deep reflection to correct some market failures with a small public financial aid to stabilize B the banking sector", weakened after Brexit. In addition, he stressed that Europe requires a "comprehensive strategy" of coordination to reduce the high level of non-performing loans generated.

"Bank profitability has recovered somewhat recently, although it still remains at very low levels," lamented the ECB vice president, referring to one of the challenges facing European banking.

Constâncio argued that the core topic of banks to revive their prospects and contribute to the intermediation of credit is to adapt to new challenges; among which he pointed out the skill of emerging companies that create financial applications (FinTech), the climate generated by low interest rates and future regulatory measures.

Despite the "encirclement" of the banking sector, which "faces consolidation difficulties in the sector", the vice-president of the European organization affirmed that in the short term deadline banks will not disappear. Their strategy will consist of a "change of business models". However, this cannot be done in a single way, because, as he defended, it cannot be applied in the same way to all; it will depend on the origin and the operating environment.

" Ingenuity, effort and the skill of each bank" are the ingredients that Constâncio recommended to face the changes: "Only a solid and profitable banking sector can serve the Economics and finance the economic growth we need".

The workshop, which was held at the headquarters of Cuatrecasas, Gonçalves Pereira in Madrid, was also attended by José Manuel González-Páramo, executive director of BBVA; José Sevilla, CEO of Bankia; and the Dean of the School of Economics, Ignacio Ferrero.