ECB Could Issue Negative Opinion On Spanish Banks' Tax, De Cos Says

The European Central Bank (ECB) could potentially issue a negative opinion toward a recently proposed tax on banks in Spain though details were still missing, Bank of Spain Governor Pablo Hernandez de Cos said on Tuesday.

The Spanish government announced the creation of the tax earlier this month, saying the temporary tax on banks should bring in 3 billion euros in 2023-2024 that will be earmarked to help Spaniards cope with soaring inflation.

The proposal is expected to be introduced in parliament this week.

"In general in the case of other countries it is not easy to establish a tax that does not end up affecting credit, interest rates or the resilience of banks, and the opinion of the ECB ends up being negative," De Cos told a financial event when asked about the tax in Spain.

"We do not know the details. Once we know them the ECB will have to issue an opinion," said de Cos, who is also a member of the ECB's governing council.

His remarks - which referred to similar taxes in countries such as Slovenia, Slovakia, Romania, Bulgaria, Poland, Hungary, Slovenia - were in line with similar remarks made last week by ECB Vice-President Luis de Guindos.

De Guindos cautioned against any tax that risked damaging the solvency of the banking sector.

De Cos also said on Tuesday that the central bank could probably revise sightly downwards Spain's economic growth for 2022 and even more significantly for 2023.

He said this would also apply to the eurozone's economic growth outlook.

The central banker added he did not see the Spanish economy entering a recession.

On Tuesday, the Spanish government raised its inflation forecasts for 2022 and 2023 and lowered its economic growth target for 2023.