‘In Europe, in general, and in Spain, more specifically, commercial banks have been the dominant market for corporate finance, unlike in America, where the advantages of having a powerful investment bank that intervenes with capital markets have always been understood’, explained Jaime Carvajal, partner and CEO of Arcano Partners and president of EVO Bank, in a new session of ‘Matins ESADE’ sponsored by Bluecap with the collaboration of La Vanguardia.

Carvajal also affirmed that ‘major American companies are basically financed by capital markets, and only 1% of major company liabilities are from banks, while that same percentage in Spain is more than 80%, a reality that is wholly linked to the importance of European commercial banks’. He explained that during an economic crisis such as the one that recently affected Spain, a dependence on commercial banks is a disadvantage because banks close the supply of credit and this damages business.

During the Matins ESADE event, Carvajal remarked that: ‘the long-term savings capacity in America directly affects the pensions of taxpayers, and is something we must learn in the Spanish financial system, where investment funds are very limited in size and are restricted in their long-term investments so that they have daily liquidity – something that is not very useful for a long-term asset’.

On the recent appointment of Jerome Powell as chairman of the US Federal Reserve, Jaime Carvajal said: ‘after years of economic boom partly due to an expansionary monetary policy,  the reduction in central bank balance sheets, including the European Central Bank, will impact the entire valuation chain’.

Irruption of finance technology

In relation to machine learning, Carvajal explained that: ‘although a very high percentage of daily trading is already done by machine, it is difficult for machines to replace people in the areas where we work at Arcano – although this is more likely in stock market management, where the volume of data is much greater and the use of algorithms can produce competitive advantages’.

In his role as non-executive president at EVO Banco he defends the new role that banks face. ‘Some 80% of transactions at EVO are made on mobile phones, and when we had more offices our clients visited them just once a year on average. He says that the satisfaction levels of EVO clients are very high. ‘Customers still want to be close to a bank, but they are looking for new experiences in an increasingly digital world, and that is what we are building at EVO’, he added.

Spanish financial panorama

With regard to the recent wave of bank mergers, Carvajal believes that: ‘we will see a few more mergers in Spain’. Referring to the future of EVO, he confirmed the news that has already been made public: ‘in a period of 18 months it would be natural for Apollo venture capital to sell the bank as it was purchased five years ago’.

Finally, in response to a question from the audience, Jaime Carvajal referred to the recent alliance that Arcano has agreed with Jefferies, the US investment bank, and said: ‘Jefferies brings industry experience and distribution capacity as they have America’s largest distribution network for bonds and equity’.