Ana Botín is the executive president of Banco Santander and regularly contacts journalists from all over Latin America to review the present, but especially the future, of the region, clearly linked to the growth expectations of the bank’s assets in the region. This is the 19th Santander – Latin America meeting, and it was held in the so-called Financial City of Santander, in Boadilla del Monte, on the outskirts of Madrid.
Predictably, inflation was a recurring theme in the back and forth of questions and answers. After many years, the phenomenon of sustained price increases is no longer an exclusive concern of Argentines and is today the subject of daily attention.
Around the world, the monthly price index is eagerly awaited as is the news monetary adjustment that central banks are communicating in turn, starting now with the US Federal Reserve, which will raise policy rates again today.
Ana Botín chose to talk about the problem of inflation in general but tried to avoid precise definitions of Argentina, where, as is well known, inflation, monthly or yearly, is close to 10 times higher than the Western average.
In any case, the powerful Spanish banker has left obvious marks than what he expects from Argentina.
“Inflation is a great challenge and the main tool to lower it is balance public finances. To regain trust, sustainable tax policies e hypotheses as orthodox as possible “.
Botín stressed that it is also very important restore sustainable economic growth. “If there is no growth, there is no social policy possible, there is no more private investment, there is no improvement in education or public health, and there is no more employment.”
When he was pressed to deepen the definitions, he stopped: “I don’t manage public policies, but in addition to fiscal policies it is necessary deregulate the economy, open it up and allow more investment “. He insisted that Argentina has enormous potential in terms of natural wealth and human resources.
He underlined the importance of the agreement with the International Monetary Fund and remarked: “Like any agreement, it must be respected. He added that “without a doubt the Argentine economy presents enormous challenges, it is clear that lowering inflation is one of them. But in the end what matters is to unfold the great potential that the country has. We need to focus on achieving that mid-term vision that can be achieved to a situation of balance of public finances which leads to greater private investments ”.
Botín has given way to the CEO of Santander in Argentina, Alessandro Butt, present at the meeting, to broaden the bank’s vision: “We must realize a taxation system so that all economic actors can play and that they can create opportunities on the supply side “ summary.
In general terms, speaking of inflation in the world, he declared himself in favor of Central Banks support monetary tightening – raise rates – enough to shatter inflationary expectations. “It’s tough, but it’s the best way to get over the problems. The price to pay today is high, but if it is not paid now, the poorest sections of the population will suffer ”.
In this sense, praised the Central Bank of Brazil, which was one of the first to initiate the increase in monetary policy rates (Selic) “and today Brazil is the only country in the world that can show three consecutive months of low inflation”.
Botín insisted that, globally, inflation has priorities 1, 2 and 3.
The banker was optimistic with the region in general, and with Brazil in particular. The return of Lula to the presidency of that country does not disturb. “We were in Brazil during Lula’s two terms, we trust Brazil.
Regarding the region, he stressed: “Latin America is prepare better than you think. There is a greater macroeconomic margin to deal with what is coming, the banking systems are more capitalized and they are much better regulated and supervised ”.
As an example, he added: “According to the IMF, growth in Brazil and Mexico is higher than expected in the United States and inflation expected by the end of next year in both countries (below 5%) is lower. al from Germany “.
This good inflation evolution is supported by the timely response of Latin American central banks.
In summary, he felt that the governments of the region “have learned to manage crises and from this crisis the countries will emerge stronger” Santander has invested more than 35,000 million euros in the region, especially since the 90s and currently has a valuable heritage 415,000 million euros in seven countrieswhere it got 42% of its results in the first nine months of this year.
The Argentine subsidiary reduced its stake in the contribution to the Bank’s global profits. Today it is close to 2% of the total, a share that has significantly decreased in the last decade.
Source: Clarin
