With the launch of the euro, two decades ago, the Banco de España started to participate in the formulation and implementation of the euro area common monetary policy. Governors from the national central banks in the euro area are members of the Governing Council of the European Central Bank, a collegial decision-making body. Governors do not represent national interests and they vote in their own capacity considering the interest of the euro area as a whole. National central banks in the euro area can also carry out other functions as long as they do not interfere with their responsibilities in the common monetary policy. For instance, the Banco de España is the national competent authority for banking supervision. However, all these additional functions do not necessarily enjoy the same level of independence3 as the monetary policy tasks conferred by the Treaty. With the creation of the Single Supervisory 2  National inflation rates had not be more than 1.5 percentage points higher than the average of the three lowest inflation rates in the European Union. In 1993 inflation in Spain maintained levels close to 5%. Achieving the Maastricht inflation criterion required major efforts in a very short period of time. Inflation dropped to levels below 2% in 1997, allowing our country to join the euro area in 1999. 3 See remarks by Yves Mersch, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, Roundtable Discussion on Central Bank Independence (Frankfurt am Main, 12 November 2019).

•  In the area of crisis prevention and resolution, the crisis in the early eighties revealed the lack of sanctioning powers and tools for crisis management. The list of possible infringements was updated. The supervisory authority was also given new tools for crisis management – as intervention measures or the replacement of management –, and an ex-ante Deposit Guarantee Scheme was established, which is also prepared to offer help and bail-out plans. This set of measures promoted and encouraged banks to adopt appropriate risk control systems and practices oriented towards prudent performance and enhancing transparency with both clients and markets. Beyond these changes, Spanish banks also learned direct lessons from the banking crisis, and managed to cope with the challenges linked to competing in a liberalised environment. In fact, banks realised that they have to make continuous efforts to retain adequate internal risk control methods and to invest in technology and human capital. Furthermore, banks have to maintain their capacity to adapt to a changing environment and be able to take advantage of the new financial landscape. The supervisory model will face new challenges ahead, as the global banking system is continuously evolving. New products of increasing complexity and new players subject to little or no regulation are continuously appearing. The model must be flexible enough to maintain its adaptability, without losing its solid foundations. Accordingly, Spanish banking supervision has recently developed its own methodology based on the continuous monitoring of every banking institution, complemented by frequent on-site inspections.