After a very challenging year due to the COVID-​19 crisis, in which Spain's GDP shrank 11%, and now thanks to signs that the economy is expected to recover, at CECA we feel it is the right time to assess the impact of the situation. The public has been very positive about the banking sector's response. Today, no one doubts the crucial role played by banking. In some way, any Spanish resident, or a close relative, has benefited directly from the measures put in place by the sector to provide financial oxygen to families, SMEs and the self-employed. Therefore, the public's assessment of the banking sector's performance during the pandemic is highly positive, receiving a score of 8 out of 10, according to the opinion poll carried out by GAD3 on behalf of the sector.

Banking has acted as a dam to contain the crisis. How far would our economy have fallen if banking had not existed? In other words, what would have happened if the banking system had not been in place to ensure access to financial services, the payment system and the flow of emergency financing? Answering this question is impossible, but it is easy to guess that the fall would have been much more pronounced. Even
leaving her in the field of the conjecture, the reflection that follows below, can help to frame the financial year.

What would have happened if the banking system had not been in place to ensure access to financial services, the payment system and the flow of emergency financing?

Emergency financing from banks for SMEs and families amounted, in just one year, to 21.4% more than the total amount of European funds that will reach Spain over the next six years. The reply of the companies has been of an unknown forcefulness offering families and companies 115,800 million euros in financing with guarantee of the ICO and granting 1,380,000 moratoria of mortgage loans
and to the consumer spending with a value of 54,500 million euros.

These allocations alone represent €170.3 billion in financing, that is, €30.3 billion more than the €140 billion in European funds earmarked for our country. This difference is even greater if the additional financing granted by banks without public guarantees is included.

The pandemic has highlighted, more than ever, the importance of the Social Welfare Projects undertaken by CECA's foundations. The social impact of the crisis has been extremely uneven, with a very significant increase in the number of people living in poverty or at risk of social exclusion.

With an investment of €772 million, Obra Social has played an essential role as the backbone of our society, reaching 24 million people and mitigating the impact of the pandemic among the most vulnerable groups.

Obra Social has played an essential role as the backbone of our society.

Banks are expected to play a key role in the reconstruction of the country through the channelling of European funds. Whether Spain can quickly emerge from the crisis and grow in the coming years not only at a greater pace, but also better, will depend on the administration's ability to manage a volume of funds that represents 11% of GDP. It is crucial that these funds be invested correctly, that is, in viable and truly transformative projects, that they be allocated with the greatest possible granularity, and that they generate the greatest multiplier effect.

Banking can contribute in all these areas. On the one hand, because it has expert and up-close knowledge of the companies and the different sectors of activity in which they operate. On the other hand, due to its experience in the analysis of the viability of investment projects. It also has the necessary capillarity to effectively deliver funds where they are needed. Finally, bank financing, as a complement to public funding, will be essential to amplify the impact of the funds.

The public and private sectors are called on to understand each other in order to set a course, based on consensus and cooperation, towards recovery. The starting position of banks in this crisis, with high solvency and ample liquidity, has made it possible for banks to concentrate on their lending activity.

Financing will also be key to the recovery and banks will, where possible, apply innovative schemes to underpin the solvency of our companies. However, banks should always adhere to their scope of action, providing the necessary financing and ensuring strict risk management. It does not seem advisable to require banks to go further, either by assuming greater risks or by foregoing the nature of their business. In fact, if the pandemic has shown anything, it is that, where banks cannot reach with their lending activity, public support measures, including direct aid, are as necessary as they are complementary