What is the banking Pool, example and its relationship with the Bank of Spain

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The Banking pool It is usually a fairly common definition to hear or read in the fields of economics. It is natural that, being unfamiliar with economics, as some experts in the field, you need to explain what this term means, since it can be confusing and a broader cultural heritage may be necessary to find the correct functionality and definition to Form a concept. of this term, here we will clarify that concept so that you can take it home, with your business friends, with your family and never think again that the Banking Pool has something to do with billiards.

The term Banking pool is usually related to the «external financing of the company”, Este es quizá uno de esos temas que poca gente conoce y sobre el que se originan demasiados mitos y divagaciones que no aclaran lo que verdaderamente significa. Hay muchos términos económicos con un significado complejo, estos tendrían que ser estudiados en profundidad si lo que se quiere es comprender la economía como algo elemental que surge en la vida cotidiana pero que pocas persons saben. Antes de siquiera considerar acceder en el tema, debe establecer el término.

Banking pool, its definition.

You must recognize that banking pool, A term that refers to an afternoon playing pool and does not add seriousness to the act. this It is a report that the company makes, in this report it indicates all the types of financing it receives from third parties. Also known as "third party financing", it is a type of aid that is not necessarily related to the company's investments or profits.

The banking pool is the detailed risk report for banking operations, whether they are credits, financing operations, credits, guarantees, etc., all maintained by a legal person, at a certain time, in the banks with which this legal person operates.

In each application for a loan, credit policy or other financing product, requested by a business entity, the bank needs a series of documents to analyze the solvency of the company.

The banking institution not only makes a request for accounting information (the income statement, balance sheet) or tax information (Those taxes presented lately, among these are the Corporation Tax, VAT, Personal Income Tax, etc.), at the same time that you need the bank pool already mentioned.

Within the report, the commercial entity must indicate the specific financial instruments that it has contracted, the name of each bank, the expiration dates of all contracted products and the limits granted for each financing product. It is recommended to attach to this report, the latest receipts for each of the aforementioned financial instruments, you can also add a certificate of outstanding debts in each bank.

If it is not clear, here is a simple example:

An SME may have a banking pool in which it details that with one bank it has a discount line, while with another bank (second bank other than the first), it has a credit account and a leasing operation with a third party .

At the same time as this detail of indebtedness, the financial institution collects data from the risk center of the Bank of Spain (CIRBE). Having said this, we can affirm that the banking pool and the CIRBE usually coincide, this doesn't happen all the time.

Un dato conveniente a prestar atención es que las entidades financieras no disponen que declarar créditos por un importe inferior a 6 mil euros, por lo que el CIRBE no puede estar declarando riesgos por debajo de este importe. Es el principal motivo e relevance del pool bancario, tener conocimiento del grado de solvencia de la compañía.

What is CIRBE?

CIRBE, for its acronym in Spanish: Risk Information Center of the Bank of Spain (CIRBE), is a public database, despite everything, it is confidential, in which the risks that credit institutions have with their clients are collected, whether they are guarantees, credits, outstanding loan balances, etc. (Remember that this is always for balances from 6,000 euros).

If it is the case that the accounting faithfully reflects the commercial entity, understanding with this that the liabilities with the financial entities are correctly registered, the Risk Information Center of the Bank of Spain and the banking pool that is extracted from the accounting of the company. should roughly match.

Is it feasible for a bank to request information from CIRBE for a company?

Since 2002, the solution to this is that yes it can. Según hizo público el Banco de España, ya no es necesaria la autorización expresa del client. Pero la institución financiera debe realizar un reporte formal por escrito de que está en su derecho de hacerlo, esto de forma directa al cliente.

The Bank of Spain and the banking pool.

The regulatory body of the The financial sector in Spain is the Bank of Spain, whose function is carried out jointly with the European Central Bank within the Single Supervisory Mechanism. This institution executes and establishes the monetary policy of the euro zone, carries out the issuance of banknotes in accordance with the guidelines of the Governing Council of the ECB, at the same time managing the reserves of foreign exchange and precious metals in Spain, this and between other functions. Some of its powers are to control and collect information on credits, guarantees, loans and other risks that financial institutions can and do accumulate. This database is managed by a service known as the Risk Information Center or CIR (outside Spain), or also repeatedly referred to as the Bank of Spain Risk Information Center.

The fundamental objectives of CIRBE are specifically two:

1. Giving the necessary data to the entities so that they can provide risks, that is when it performs the role of banking pool.
2. It serves as a supervisory instrument for the banking sector, therefore it fulfills its function within the activities of the Bank of Spain.

How do banks declare their risks?

On a monthly basis, credit unions, savings banks, banks, the official credit institute or ICO, Spanish financial entities in foreign entities and all credit institutions provide all the required information.

It is essential to consider that, in the aforementioned list, some of the risks are excluded and some products and loans are outside or invalidated from this obligation.

Direct and indirect risks.

Once the data are obtained, they are divided into two categories:

1. Direct risks. These are related to signature or money loans and leasing. Fixed income securities are also creditors, also known as “debt securities”, excluding public debt. Some examples of the latter are: public treasury bonds or obligations, bills, etc.
2. Indirect risks. They are those that correspond to those that guarantee other clients who have loans granted.

Those who can have access to the data registered in their name are all natural or legal persons. This is done through the Virtual Office of the Bank of Spain, for this it is necessary to have an electronic DNI or a digital certificate that has been issued by the National Currency and Stamp Factory. Face-to-face access is not impossible, since it is only necessary to go to the offices of the Risk Information Center at the headquarters of the Bank of Spain, whose address is: Calle Alcalá, 48, Madrid. And as a last option, a request can be made by letter with the following sender information:

• Bank of Spain
• Financial information and central risk
• C / Alcala, 48
• 28014

All the information can be requested by the owner, for this the owner must sign the petition document and deliver a photocopy of the DNI, passport or NIE. In case the holder wishes to delegate his right, the following conditions must be met: Provide NIE, DNI or passport of the representative and the public document that proves that the delegate can exercise this function.

What are the data needed to complete the bank's pool table?

The relevance and overestimation of having all the data ordered and necessary correctly to avoid erroneous or unwanted conclusions is not unfounded. These are the basic data to complete the bank's pool table:

• The name of the entities with which the company has contracted the risks.
• El tipo de riesgo al que se refiere, ya be de crédito, confirmatorio, hipotecario, aval, etc.
• The initial amount of the risks remains in force.
• The pending amount of the risks, understood as what remains to be settled.
• Product start date.
• Product expiration date.
• Warranties that are or are linked to the product.

To end; Both individuals and companies depend on bank financing and entities ask that everything be in order, it is not very important for them that the client in question is also financed by their competitors. A concept that has its roots in financial entities, which means that between several entities, yes, but without being outside the banking sphere.