Young, CEO of BBVA: The biggest problem is high inflation

Onur Genç, Senior Manager (CEO) of the Spanish bank Banco Bilbao Vizcaya Argentaria (BBVA), emphasized that inflation is the most important agenda of all economies at the moment.

“High inflation is the biggest problem both in Turkey and in Europe. The inflation numbers look very high,” Genç said, “In periods when inflation is high, central banks try to bring inflation down and control it by raising interest rates. Since they can’t clearly see where inflation is and where it could be, we can’t predict where central banks’ interest rate decisions will be,” he said.

‘HOW LONG IT WILL LAST, NO ONE KNOWS’

Saying that the main agenda of the banking sector in Europe is inflation and interest rates, Genç said no one knows the answer to the question of how long Europe’s record inflation will continue this year.

Explaining that he had meetings with three different investment banks in the last two weeks, Genç made the following assessment:

“We talked about where the European Central Bank will bring interest rates at the end of 2023.

Interest rates in Europe are at 1.5% today. By December 2023, interest rates, one of these investment banks will go up to 3 percent, the other to 2 percent and the other to 4 percent, he said. 2, 3, 4 seem like simple numbers, but they have a huge impact on the economy. Why does everyone say different? Because no one can predict how much and how fast inflation will come down.”

‘MUCH HIGHER IN TURKEY’

Noting that especially the European Central Bank and the United States Central Bank followed easy money policies for many years to activate the economy and, as a result, there was accumulated tension, Genç said:

“Natural gas in Europe is now 8 times higher than before the war. The rise in gas and oil prices triggered inflation, but also paved the way for the tension accumulated over the years. Now that that tension has dissipated, inflation remains high.

The figures are much higher in Turkey, but inflation of 10 to 11 percent in Europe is also unprecedented.

So how fast this figure can drop and to what level, and whether interest rates will be 2, 3 or 4 as a result, is currently on Europe’s agenda.”

‘PROBLEM WITH LOAN REFUND’ SIGN

Genç continued as follows:

“Our main agenda is inflation. Where will be the interest rates linked to inflation.

In relation to where the interest rates will be, one of the important issues at the root of our business is the repayment of the loans that we make.

If interest rates rise too high and the economic downturn hits hard, the bank’s credit costs will rise. Problems begin to occur in the repayment of the loans we give. So what about inflation and interest rates? What could be the resulting effect? What could be the costs of the loan? We have to read them well.”

‘I AM GRADUATED IN ELECTRICITY FROM THE BOSPHORUS, WORK INTENSE’

On the other hand, Genç said that he was born in the Çarşıbaşı district of Trabzon, and that he studied at Carnegie Mellon University in the United States with a scholarship from the Turkish Education Foundation, after Trabzon Anatolian High School and Boğaziçi University.

Saying that his normal job is to get up at 7:00 a.m. and be at work at 8:00 a.m., and work until 8:00 p.m. unless there is a special situation, Onur Genç, 48, explained his pace diary as follows:

“When I get to work in the morning, I first check what is happening in the markets. Banking is also the job of reading the market and my first job is to assess the market.

Then after 1 hour of Spanish course every day, now two days a week, my meetings and interviews start at 09.30.

As BBVA, we have relationships with many people and institutions, as well as with our executives in the countries where we operate.

We have our regulator, the European Central Bank and the Central Banks of each country in which we are. If I don’t have a meal for the client, I eat very quickly, in 15 minutes, and I resume my work rhythm. If there is a business lunch in Spain, it takes 1.5-2 hours. I graduated in electronics from Boğaziçi, I work hard, my life was like that.” (AA)