{"id":41596,"date":"2023-03-14T21:00:00","date_gmt":"2023-03-14T20:00:00","guid":{"rendered":"https:\/\/www.11onze.cat\/?p=41596"},"modified":"2024-01-29T18:14:44","modified_gmt":"2024-01-29T17:14:44","slug":"downturns-historical-bank-profits","status":"publish","type":"post","link":"https:\/\/www.11onze.cat\/en\/magazine\/downturns-historical-bank-profits\/","title":{"rendered":"Downturns and historical bank profits"},"content":{"rendered":"<div class=\"component text\">\n  <div class=\"container\">\n\n\n    <div class=\"row\">\n      <div class=\"col  col-lg-8  offset-lg-2\">\n        <h3><b>In &#8216;Animal Farm&#8217;, George Orwell wrote that &#8220;all animals are equal, but some animals are more equal than others&#8221;. The latest downturns we have been suffering from seem to reflect the words of the English writer in his satirical fable: while the population suffers the consequences, the banks are finding the goose that lays the golden egg.<\/b><\/h3>\n<p>&nbsp;<\/p>\n<p><span style=\"font-weight: 400;\">The rise in interest rates with which the European Central Bank wants to combat the inflationary spiral has had direct consequences for families, who see their <\/span><b>mortgage repayments soar with the rise in the EURIBOR<\/b><span style=\"font-weight: 400;\">, for businessmen, who find it more difficult to carry out investment projects, and for the State, increasing its risk premium and, therefore, the cost of public debt.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">On the other hand, these measures have led to <\/span><b>wider profit margins for banks<\/b><span style=\"font-weight: 400;\">, which have also tightened credit and limited their money supply. A rise in interest rates, which, unlike the interest applied to savings, is immediately passed on in the case of variable-rate loans or mortgages.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">According to Bloomberg estimates, the six Spanish banks listed on the Ibex &#8211; Santander, BBVA, CaixaBank, Sabadell, Unicaja and Bankinter &#8211; will report <\/span><b>record profits of almost 20 billion euros by the end of 2022<\/b><span style=\"font-weight: 400;\">. In other words, the increase in the extraction of income from families and companies has provided unprecedented profits for financial institutions, in a context of crisis where a large part of the population can barely make ends meet.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><b>Repeating the same pattern, expecting different results<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">For its part, the banking sector rejects that this is an extraordinary situation, arguing that the increase in interest rates has simply<\/span><b> brought monetary policy back to norma<\/b><span style=\"font-weight: 400;\">l. It argues that for years, because of interest rates at historic lows, where they had low margins, it was very difficult for them to generate income. Claims that seem to contradict the also historically record profits in 2021.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Bearing in mind the role that banks have played in the financial crises we have suffered, whether in financing speculative bubbles, <\/span><b>accumulating the risk generated by their own speculation<\/b><span style=\"font-weight: 400;\">, or turning off the tap of financing to businesses and consumers who later had to pay for their rescue, the arrogance and indifference of this sector towards the suffering of the population that sustains its business model is surprising.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Perhaps this combination of incompetence, corruption and arrogance should serve to <\/span><b>curb crony capitalism between political and financial power from the core<\/b><span style=\"font-weight: 400;\">. The social and economic improvements needed to achieve a fairer society are incompatible with a financial system designed to serve the elites, and which feeds back by maintaining the favouritism of political power.<\/span><\/p>\n<p><b>11Onze is the community fintech of Catalonia. Open an account by downloading the app El Canut for <\/b><a href=\"https:\/\/play.google.com\/store\/apps\/details?id=com.e11onze.app&amp;utm_source=emailing&amp;utm_campaign=CANUT+launch\"><b>Android<\/b><\/a><b> or <\/b><a href=\"https:\/\/apps.apple.com\/us\/app\/11onze\/id1566129237?utm_campaign=El+Canut\"><b>iOS<\/b><\/a><b> and join the revolution!<\/b><\/p>\n\n      <\/div>\n    <\/div>\n  <\/div>\n<\/div>\n\n\n<div class=\"component cards\">\n  <div class=\"container\">\n    <div class=\"row\">\n      <div class=\"col col-xl-8 offset-xl-2\">\n        <h1>If you liked this article, we recommend:<\/h1>\n        <div class=\"cards__wrapper\">\n          <div class=\"card\">\n            <a href=\"https:\/\/www.11onze.cat\/en\/magazine\/europe-central-banks-red\/\" class=\"card-link\" target=\"_self\"><\/a>\n            <div class=\"card-img\">\n              <img decoding=\"async\" src=\"https:\/\/www.11onze.cat\/wp-content\/uploads\/2023\/01\/THUMBNAIL_RESCAT_BANC.jpg\" class=\"card-img-top\" alt=\"\">\n                <span class=\"card-category\">Culture<\/span>\n            <\/div>\n            <div class=\"card-body\">\n              <p class=\"card-title p2\"><strong>Europe\u2019s central banks in the red<\/strong><\/p>\n              <span class=\"card-time\">4 min read<\/span>\n              <p class=\"card-text small\">Rising interest rates have created a gap between the&#8230;<\/p>\n            <\/div>\n          <\/div>\n\n\n          <div class=\"card\">\n            <a href=\"https:\/\/www.11onze.cat\/en\/magazine\/rise-cost-money-affect-us\/\" class=\"card-link\" target=\"_self\"><\/a>\n            <div class=\"card-img\">\n              <img decoding=\"async\" src=\"https:\/\/www.11onze.cat\/wp-content\/uploads\/2022\/05\/THUMBNAIL_ENCARIMENT_DINER.jpg\" class=\"card-img-top\" alt=\"\">\n                <span class=\"card-category\">Economy<\/span>\n            <\/div>\n            <div class=\"card-body\">\n              <p class=\"card-title p2\"><strong>How does the rise in the cost of money affect us?<\/strong><\/p>\n              <span class=\"card-time\">5 min read<\/span>\n              <p class=\"card-text small\">The United States has just raised interest rates and&#8230;<\/p>\n            <\/div>\n          <\/div>\n\n\n          <div class=\"card\">\n            <a href=\"https:\/\/www.11onze.cat\/en\/magazine\/11onze-gold-corrects-inflation\/\" class=\"card-link\" target=\"_self\"><\/a>\n            <div class=\"card-img\">\n              <img decoding=\"async\" src=\"https:\/\/www.11onze.cat\/wp-content\/uploads\/2023\/01\/THUMBNAIL_VALOR_OR.jpg\" class=\"card-img-top\" alt=\"\">\n                <span class=\"card-category\">Economy<\/span>\n            <\/div>\n            <div class=\"card-body\">\n              <p class=\"card-title p2\"><strong>11Onze\u2019s gold corrects inflation<\/strong><\/p>\n              <span class=\"card-time\">2 min read<\/span>\n              <p class=\"card-text small\">Year-on-year inflation in Spain in 2022 was 8.4%&#8230; <\/p>\n            <\/div>\n          <\/div>\n\n              <\/div>\n              <br>\n              <br>\n              <div class=\"cards__wrapper\">\n\n        <\/div>\n      <\/div>\n    <\/div>\n  <\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"","protected":false},"author":71,"featured_media":41591,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","footnotes":""},"categories":[1],"tags":[172],"class_list":["post-41596","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-economy"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Downturns and historical bank profits - 11Onze<\/title>\n<meta name=\"description\" content=\"The consequences of the pandemic and the inflationary crisis seem to be devastating for everyone but banking. 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