In his speech, the Governor of the Bank of Spain addressed the recent crisis developments in Europe and in Spain, as well as the challenges that lie ahead.
The strong push towards economic and financial integration that accompanied the process of accession and the setting up of EMU triggered a period of intense economic convergence among member countries. This was especially the case in countries such as Spain, which had joined the project starting from real income levels below those of the main economies of the area.
However, this process went hand in hand with the accumulation of imbalances at the domestic and European levels. The deep integration of European capital markets – one of the most remarkable features of the Monetary Union – resulted in a large availability of financing to those economies whose prospects were perceived as brighter. In this process, Spain has become a sort of case study.
The economic and financial crisis in Spain and other euro area countries – with its particular mixture of international and domestic elements – has also brought important lessons in terms of financial stability. One of them is the relevance of the macro-prudential layer of supervision and the fact that having a good micro-prudential supervision is a necessary, but not sufficient, condition to build a resilient financial system. There is the need for developing the framework and the tools to ensure that the macro perspective is duly taken into account. The recent BIS report on macro-prudential instruments – presented in our last meeting in Mexico – is a good step in that direction. However, the report and the discussion surrounding it also highlights the difficulties of setting up a proper macro-prudential framework, at the local, regional and global level.
Another lesson I would like to mention refers to the importance of a close cooperation between home and hosts supervisors, which has materialised in Supervisory Colleges, playing an important role in this context. Indeed, the setting up of the European Single Supervisory Mechanism, a process which will have its starting point next year, will entail new challenges for eurozone supervisors, who will also need to develop new procedures in their relations with supervisors of other regions.
Full speech
© BIS - Bank for International Settlements
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