of 22 december 2011 on the macro - prudential mandate of national authorities ” ( esrb / 2011 / 3 ) : https : / / www. esrb. europa. eu / pub / pdf / recommendations / esrb _ 2011 _ 3. en. pdf see recital 24 of regulation no 1092 / 2010 of the european parliament and of the council on european union macroprudential oversight of the financial system and establishing a european systemic risk board : the ecb and the national central banks should have a leading role in macro - prudential oversight because of their expertise and their existing responsibilities in the area of financial stability. national supervisors should be involved in providing their specific expertise. the participation of micro - prudential supervisors in the work of the esrb is essential to ensure that the assessment of macro - prudential risk is based on complete and accurate information about developments in the financial system. accordingly, the chairpersons of the esas should be members with voting rights. one representative of the competent national supervisory authorities of each member state should attend meetings of the general board, without voting rights. in a spirit of openness, 15 independent persons should provide the esrb with external expertise through the advisory scientific committee. https : / / eur - lex. europa. eu / legal - content / en / txt / html /? uri = oj : c : 2016 : 202 : full & from = en 5 / 9 the banking sector should be activated or deactivated. accordingly, other sectoral financial regulators are given responsibilities for activating their own tools. in particular, the banco de espana is now empowered to require that banking institutions establish countercyclical capital buffers by credit segment, limits on concentration in relation to economic activity sectors, and limits and conditions when underwriting new loans ( in terms of loan - to - value, loan - to - income and debt service - to - income ratios, and also the maturity, the currency in which the operation is denominated and whether the interest rate is fixed or variable, among others ). these new instruments complement those previously available to the banco de espana and included in the european legislation : 11 the countercyclical capital buffer, the systemic risk buffer and the buffer for systemic banks, among others. in addition, this year saw the creation of the macroprudential authority financial stability council, whose main goal is to contribute to the promotion of coordination and the exchange of information on financial stability issues among

decision - making, boards ’ collective skillset and the degree of formal independence within the board. governance is an area where supervisors pay a lot of attention, because we are aware of the importance of a robust governance structure and functioning. an example of this is that 7, 371 findings have been raised in this area since the ssm was created, of which 1, 303 remain open. this is because there is always room for improvement and governance should not be seen as a static element. on the contrary, as new challenges arise ( climate risks, esg, digitalisation, etc. ), governance needs to be updated to properly address them. how can we keep encouraging our institutions to improve their governance framework? i believe that we need to continue our supervisory activities, placing greater emphasis on a structured escalation of our supervisory interventions ( escalation ladder ), and insist that a strong board of directors is key to the smooth functioning of banks. we should therefore continue to strengthen governance regulations to make them clearer, in particular as regards fit and proper processes and diversity, to build strong boards for sound decisionmaking. non - executive directors in this decision - making process, non - executive directors ( neds ) play a crucial role. they should oversee management and focus on the key issues that are of concern to all stakeholders. these of course include the usual financial activities, but also emerging risks that could severely impact banks that are not properly prepared for them. in today ’ s complex business environment, new technologies and digital transformation are a key focus for all institutions, specifically for neds. we are in a situation of continuous and very fast change on the digital front, so it is crucial for organisations to be prepared and simultaneously adapt to new applications. i would like to highlight two key elements in this regard : first of all, the importance of defining the digitalisation strategy for the institution. digitalisation is a broad concept that covers different aspects, and it needs to be clearly defined and specified for each institution. and second, the importance of establishing a robust operational resilience framework. the current pace of digital transformation at financial institutions is unprecedented. but increased digitalisation also entails greater ict and cyber risks. not only are malicious attacks against financial institutions and their customers on the rise, but the enormous complexity of these institutions ’ ict systems makes operational errors more likely. in addition, institutions ’ increasing reliance on specialised third parties, very often involving a multi - tiered supply chain, makes operational risk management