Francisco González, chairman of BBVA, Spain’s second largest bank, has delivered a damning attack on the US financial system. He accused American banks and mortgage brokers of acting “immorally” by pushing loans to clients who could not afford them.
González’s remarks came during a report on BBVA’s full-year profits, up almost 30 per cent last year to €6.13 billion
“If US banks had stuck to three principles,” said González, “to obey the law, ensure your actions are morally acceptable, and conduct business in a transparent fashion, the subprime mortgage problem would not have happened.
“Banks should aim to have long-term relations with their clients. So you don’t sell them rubbish products, you don’t offer loans to clients who cannot afford to repay you, and similarly, you do not lend to overstretched companies.”
An upbeat González said investor fears about Spain were overblown and said the Spanish government was studying ways to make mortgage-backed securities more attractive to foreign investors.
Spanish banks have been unable to raise funds in international markets since last summer, with Spain’s slowing econonomy and the end of the housing boom.
González said: “Outside opinion of Spain is very negative. Investors are convinced there are hidden economic problems and, as a result, no one wants to invest. So the government is looking at how to make Spanish mortgage-backed bonds more attractive.”
BBVA raised €38 billion early last year and as a result, González said, the bank has more than enough liquidity to survive the credit squeeze hitting so many of its competitors in Europe and the US.
The group said it had no exposure to the sub-prime debacle.