Volatility to remain until fiscal union is discussed, says Pictet’s Spain country head

Volatility will prevail in financial markets until three measures are taken for a definitive solution to the eurozone crisis, says Luis Sánchez de Lamadrid (pictured), managing director at Pictet WM in Spain.

Debt restructuring, monetization by the European Central Bank and a more convincing approach to integration and fiscal union within the area will be necessary to convince markets that European leaders are committed to solve the crisis of the monetary union, according to the country head of the company.

“Today people are more aware of risk, which is less tolerated. We perceive that investors are back to the basics sources: fixed income, equities and liquidity. In any case, the Spanish customer wants growth when markets rise and fixed income when they fall, so they need flexibility,” he tells Investment Europe.

Moreover, private banking clients are unhappy with their banks, which have not been perceived close enough or able to offer new products during the crisis.

“The average Spanish financial customer culture has raised a lot and clients now want to understand their investments,” he adds.

Spain also differs from neighbouring countries on tax rates and vehicles. The most common vehicles in the market are Spanish Sicavs and mutual funds, due to the fact that transfers between funds do not have fiscal impact.

“The Spanish market is controlled mainly by Spanish commercial banks as BBVA, Santander and La Caixa. Currently there is a process of tax amnesty in Spain as there has been a few in Italy and also in Portugal,” Sánchez adds.

Sánchez joined Pictet by February 2011, having previously worked at Swiss bank BSI and UBS Spain.

A full interview with him will be published in the next issue of Investment Europe.

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