José Manuel Campa interview with L'Echo: ‘The government bond is a legitimate weapon of the state’

  • Interview
  • 14 FEBRUARY 2024

José Manuel Campa, European banking supervisor: ‘The government bond is a legitimate weapon of the state’

The Chairperson of the European Banking Authority (EBA) is of the opinion that European governments have full legitimacy to issue a bond that competes with banks.

The head of the European Banking Authority (EBA) has nothing against the bonds that certain European governments, such as the Belgian one, are issuing. José Manuel Campa considers that they have full legitimacy to compete with banks on their own turf.

This statement from the European banking supervisor contrasts with the position of the Belgian banks, which are highly critical of the 1‑year government bond introduced by Minister of Finance Vincent Van Peteghem (CD&V), which has diverted nearly EUR 22 billion from savings accounts.

At a time when the Belgian Debt Agency has just proposed issuing a second – tax-efficient – 1‑year government bond, Vincent Van Peteghem has the unexpected support of the European Banking Authority.

Even if banks are not in immediate need of liquidity, they still need to pay higher interest rates to their customers and provide them with a good service. Otherwise, they risk losing large numbers of those customers.


‘The government bond has been a great success in both Belgium and Spain,’ says Campa, Chairperson of the EBA. According to the European supervisor, this success can be explained by consumers’ hunger for alternative solutions to banking products, which do not always meet their expectations.

‘It’s reasonable to look for alternative financing or investment solutions outside the banks. If the state wants to issue government bonds to private individuals, that’s perfectly legitimate. If the state issues debt for the financial markets, it can do the same for private individuals,’ Campa says.

A robust and competitive banking sector

For the European supervisor, the government bond is a legitimate weapon available to governments wishing to stimulate banking competition. ‘As the banking supervisor, the EBA wants the banking sector to be robust and, above all, competitive. The sector has to be attractive to both investors and depositors. And it needs to be competitive, especially when interest rates rise sharply, as they have been doing over the last 2 years,’ says Campa.

The Chairperson of the European Banking Authority is acutely aware of the need to ensure a competitive banking environment. This is the very criticism that was raised about Belgian banks. When the policy rates set by the European Central Bank surged, banks took their time passing that increase on in the interest rates of their savings accounts.

‘If banks don’t raise their interest rates on savings when rates are rising, they risk losing customers.’


The Belgian Competition Authority has even published a report denouncing a form of banking oligopoly in which the four major banks are engaged in entirely relative competition over savings rates.

However, according to the EBA Chairperson, banks have every interest in offering competitive products, especially in an environment of high interest rates. ‘If banks don’t increase their interest rates on savings in these circumstances, they risk losing customers. That can affect their business model. This is very important: banks need to support the economy and offer their customers competitive products, in order to keep them. They need to think about their long-term relationship with their customers.’

In his role as banking supervisor, Campa believes that Europe’s banks are robust enough. The EBA has subjected them to stress tests, which have produced good results. The Belgian banks passed with flying colours.

No excessive profits

Successive increases in policy rates are creating a favourable environment for banks, which have reported excellent results for 2023, with record profits. However, Campa rejects the term ‘excessive profits’.

‘The profitability of banks depends on interest rates. Over the last decade, when interest rates were very low, the banks did not make great profits. Now, rates have recovered and they are making hay. We mustn’t be frustrated by this situation. Some people refer to profits as ‘falling from the sky’ or being ‘unjustified’. ‘That,’ Campa says, ‘is wrong.’


The interview was conducted by Gilles Quoistiaux.

Les Echos (Belgium).