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The contribution of public banks to the Spanish financial system

Pablo Zalba, president of Spain’s Instituto de Crédito Oficial (ICO) was the keynote speaker at Desayunos ESADE, where he analysed the Spanish economy, the role of ICO in corporate finance and the fallout of Brexit.

The recent Desayunos ESADE on July 12th, featured ICO president Pablo Zalba accompanied by Pedro Navarro (MBA 67), executive vice-president of the ESADE Foundation board of trustees, who introduced the topics covered during this talk entitled ''The outlook for Spain in the new European scenario.''

The role of public banks

The first question by Pedro Navarro concerned corporate finance and the need for public banks in a robust financial system like that of Spain. Zalba’s response was categorical, ''I am a staunch supporter of public banks as a complement to private banks, able to detect and help remedy market shortcomings.'' He gave details of the contribution made by ICO lines of credit to the Spanish economy: an injection of €60,000 million since 2012. He pointed out that this investment helps create and maintain jobs, and helps Spanish companies go global. The ICO is complemented by high-street banks which all offer ICO products. It does not finance a particular project but takes part together with other financial entities and investors. Hence the participation of the ICO is in itself a guarantee.

A robust financial system that generates confidence undoubtedly also attracts foreign investors, who constantly praise the good situation of the Spanish economy.

As regards companies and wages in Spain, Pablo Zalba said that according to economic data, the country is on the right track and its exports and employment are growing. The globalisation of Spanish companies is a lever for the positive development of the Spanish economy. ''This globalisation depends heavily on the industrial sector, where the quality of employment is higher than in other sectors. I think we can be reasonably optimistic about the quality of employment and wages,'' said Zalba.

The matter of globalisation cropped up several times during the talk because Zalba sees it as a cornerstone of the growth of the Spanish economy, and the ICO contributes to the globalisation of Spanish companies, for example, by providing finance in local currencies or raising funds under the Juncker Plan.


Much was said about the exit of the United Kingdom from the European Union and the possibility of Madrid picking up some of that international finance, and also whether Brexit was a risk or an opportunity.

Zalba began by talking about the doubts about the type of Brexit to be negotiated. ''I think there are more questions than answers and I also believe that the City will continue to be a global financial centre,'' he said. Some large companies and banks are, however, relocating and this is enabling some European capitals to absorb part of that diversification. Zalba seized the opportunity to highlight Madrid as a financial hub, being the headquarters of two of the leading EU banks.

Pablo Zalba believes that Brexit is a risk for the United Kingdom because it was unable to take advantage of the progress offered by the EU, and he described the decision to hold a referendum as ''irresponsible''. ''The EU bloque is more united than ever, I think the European Union has made progress on account of the crisis and decided to pay dearly in order to salvage a political project,'' he said. He also mentioned Macron’s victory in France and how he won the elections with a firm stand in favour of the European Union.

Spain’s role in the EU

The ICO president highlighted the example of Spain in the European Union. Thanks to Spain’s structural reforms it is growing at a good rate of more than 3%. However, the target deficit and borrowing have not been achieved and, in Zalba's words, ''we must learn from experience'' and mitigate the negative impact of said structural reforms on deficit and borrowing, which prevent them from complying with the objectives set by Europe.

However, one thing that was made clear during question time was that no Spaniard holds a key position in the European Union. Zalba emphasised the work carried out anonymously by many senior Spanish officials in the European Parliament and predicted that Spain will occupy key positions in the near future. Programme

Pablo Zalba, chairman of ICO, will be the keynote speaker at the forthcoming Desayunos breakfast talk entitled ''Outlook for Spain in the new European context.''

This talk will examine the political and economic framework of Europe, the outlook for Spain in this new context and the work of the public bank ICO and its role in consolidating Spain’s economic recovery.

Pedro Navarro (MBA 67), executive vice president of the ESADE Foundation board of trustees
Pablo Zalba, president of ICO Pablo Zalba

Pablo Zalba Bidegain was appointed president of ICO by Royal Decree 537/2016 dd November 18. He holds a degree in Business Administration (University of Navarra); Executive MBA (London Business School); and has studied economics at the University of Leicester (UK) within the Erasmus programme.
Between 2009 and his appointment as president of ICO, he was a member of the European Parliament in Brussels and Strasbourg. Since 2011, he has been Vice-Chairman of the Committee on Economic and Monetary Affairs.

Prior to entering the European Parliament he held various management positions in private companies including SIC Lázaro, COMANSA and Arcelor Mittal. In addition, since 2014 he has been the coordinator of ''European Dialogues'' at the University of Navarra. For further information:

Language: Spanish