24 October 2019

Margarita Delgado: The Banking Union - a key building block of the EU project

Opening remarks by Ms Margarita Delgado, Deputy Governor of the Bank of Spain, at the roundtable "Banking Union - Five years in the making", in which she shares a few general thoughts on the European Union project and the role the Banking Union plays as part of this collective endeavour.

Margarita Delgado points out what the BU has meant in terms of greater integration for the euro area banking sector, and she also refers briefly to those developments that, in her view, may still be missing if we a truly integrated and cross-border banking sector should be achieved.

The EU project has certainly improved the life of millions of people in Europe since its creation, not only in economic terms, but also regarding rights and living standards across the whole Union. 

The success of the EU project cannot be assessed solely on the basis of its economic performance; there is need also look at its other original objectives, namely, to increase the level of political and economic integration in the region.

Throughout its history, the EU has followed a path towards greater economic and political integration, which has brought clear benefits in terms of economic growth and citizens’ rights. 

The BU is an important step in this direction and has been key to addressing the euro crisis. Still, the implementation of certain regulatory and institutional elements are needed to reap the economic benefits of an increase in cross-border banking activities.

Margarita Delgado says: “When assessing our capacity to deal with future financial crises, we should not forget that the institutional setting remains incomplete and policy space has been reduced. As memories of the crisis fade, we should strive to avoid complacency. 

“It is often said that in life you should expect the best but be prepared for the worst. Likewise, as supervisors we should strive to avoid financial crises, by applying supervisory tools to mitigate risk accumulations as well as reinforcing banks’ management capabilities; but, at the same time, we should work with a longer-term perspective to complete the institutional framework, in case a crisis still occurs.”

Full speech on BIS

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