ESADE was the setting for the first ever public debate between the CEO of La Caixa, Isidro Fainé, the CEO of Banc Sabadell, Josep Oliu, and the Catalan Minister of Economy and Finance, Antoni Castells. The directors of Catalunya's two most important banks analysed the current economic crisis during a round table discussion moderated by the ESADE Director General, Carlos Losada.

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The debate, attended by over 500 people, examined issues such as assets inflation, the hike in petrol and food prices and the widespread loss of confidence. Castells' statement that “we are now suffering the worst economic crisis since Spain entered the Eurozone” summed up the general feeling.

Despite the critical future faced by the banking sector, both CEOs remained optimistic and assured that Spanish banks have liquidity and are not cutting back on credit facilities. In the same tone, Castells pledged “there aren't going to be stumbling blocks when it comes to corporate financing projects”.

Oliu did recognise though that the perception of risk has changed, especially with regard to sectors such as real estate, but insisted that “the willingness to give mortgages has not changed in the slightest”. Here he coincided with Fainé that the true conflict lies in the lack of demand due to price increases and interest rates. According to Oliu, this sluggishness is caused by the anticipation of “price cooling” which makes it more difficult for banks to obtain money from outside sources. He also upheld that it is a problem of confidence and that however much liquidity there may be, security will not be regained until “some semblance of normality returns”.

Forecasts about the crisis
Forecasts regarding the crisis situation were on the whole positive. Fainé predicted “we will have a crisis for at least another year” and that economic rebalancing will last two years. He added that economic recovery will not be immediate and suggested an optimistic scenario with “a sharp drop and a slow rise”, similar to the famous Nike 'Swoosh' design, he explained.

Oliu, however, iterated that “we are facing a serious situation” and claimed that the only departure is for salary growth to be less than inflation growth. Likewise, it is necessary to increase productivity, as otherwise there would be more unemployment and if this were to happen we could nose-dive into a “severe crisis”, he cautioned.

Similarly, Castells warned that we cannot let “cracks in society” appear, and that immigration, which in its day was a positive factor for the growth of Spain, “cannot be seen now as a bone of contention”. In response to the question posed by ESADE Director General, Carlos Losada, about the expected end date of the crisis, the Minister clarified that the most important thing is not to recover in 2009, but to come back fighting in 2010.