The type of regulation to which it should be subject is also uncertain. Irrespective of what the future may hold, banks’ classical role remains fundamental today to economic development. In the absence of deep secondary markets at the European level, where it would be possible to convert long-term funding into liquidity through the market, the banking sector is still the main vehicle through which savers’ wish to have their savings available can be reconciled with the need of those demanding funds to have stable funding over time.1 Naturally, this does not mean that credit growth should always be positive, as we were painfully reminded by the crisis. In this respect, the debt ratios of households and firms in Spain reached excessive levels of 85% and 133% of GDP, respectively, before the crisis broke. Fortunately, since their 2008/2009 peak, debt ratios have moved on a markedly downward trend, converging late last year with the average EU levels of 60% for households and 90% for firms. Bank lending has been decreasing throughout this period of household and corporate deleveraging. Nonetheless, this decrease has recently reversed. Specifically, if we look at 12-month cumulative data, the net flow of financing granted to households turned positive in June 2018, posting a year-on-year growth rate of 0.5% in April 2019. Firms’ net global financing flows have also held at positive levels since October, attaining year-on-year growth of 2.6% in April 2019.
This awareness also reflects the difficult economic and financial context in which we have been moving. Evidently, financial end-consumers, especially individuals, are the weakest party in the customer-bank relationship.4 Hence the importance of banks behaving irreproachably when it comes to advice to customers to engage their services. However, we should acknowledge that the starting point is a significant shortfall in financial knowledge among citizens, a fact that may have been conducive to erroneous decision-making. Evidently, to be able to take an economic decision properly, a customer must be in full possession of all information and capable of understanding the implications that may arise in the future from what is to be signed. For instance, the consequences of taking on a variable interest rate throughout the life of a 30-year loan need to be understood, and variable income must be assumed to be so-named because of its variability. Admittedly, the younger generations are facing growing challenges arising from labour market aspects. These include the lack of job security, the need for flexibility and mobility, and property market developments. They are also especially affected by the structural changes in society, such as increased life expectancy or the reduction in the birth rate. This all involves the need to plan carefully for the future. We should not forget that education and financial knowledge are essential for improving financial inclusion. Clearly, digital transformation may help in this respect, especially in remote or thinly populated areas.