22. 10. 2020 closing address to the cnmv conference on financial sustainability the cnmv's activity in the area of sustainable finance margarita delgado deputy governor good morning everyone. i would like to thank the national securities market commission ( cnmv ), and in particular its vice - chair, for kindly inviting me to close this conference on sustainability. i regret not being able to attend the presentations over the last two days, but judging by the topics addressed and the quality of the speakers, i am confident that the conference has been a success. i think that it is difficult to find an aim that is more global or shared more widely than the fight against climate change. although this consensus has gradually developed over time, it is clear that it has quickly grown recently. traditionally, this challenge has been addressed through fiscal policies. from a theoretical standpoint, and in the opinion of the banco de espana, these policies continue to be the most suitable for resolving the challenge posed by pollution. more recently, a co2 emissions trading system has been developed in europe, pursuing the same objectives of internalising environmental costs, which is currently being revised. nevertheless, this type of conventional measure has been complemented by other developments. the foremost of these are undoubtedly technological changes and the falling cost of renewable energy production, together with the shift in economic agents'and the public ’ s attitude and awareness as regards sustainability. indeed, in contrast to what usually happens in legislative or transformative processes, the private sector has spearheaded many of the sustainability - related initiatives, such as the development of the green bonds market, arising in response to growing demand for responsible investment, regardless of supervisors. the cooperation of the private sector is also manifest in expert groups, which are helping authorities to define legislation and actions relating to this issue. examples include, in the european arena, the eu high - level group on sustainable finance, set up by the commission in 2018 to advise on sustainability matters ; turning to the financial stability board ( fsb ), the creation of the task force on climate - related financial disclosures ( tcfd ) in 2015 is particularly noteworthy. indeed, regulators and supervisors have also recently stepped up their involvement. and they have done so significantly. this conference organised by the cnmv is a good example of this. as you are all aware, the climate change and energy transition law is in the process of being approved by parliament ; this law envisages that a huge volume of investment ( around €200 billion

think that the most “ efficient frontier ” involves a mixture of minimum rules, tempered by supervisory discretion, and supplemented by market - based incentives. current industry practices and issues that arose in consultations let me now move to current industry practices and how transparency is incorporated into the basel framework. in deciding to revise the 1988 accord, the basel committee thought carefully about what improvements to banks ’ public reporting would mirror the new accord ’ s incentives - based approach to foster improvements in risk management. in recent years, the committee has noted some improvements in the quality of bank reporting worldwide. annual surveys conducted by the committee suggest that the extent of banks ’ public disclosures has increased markedly in some areas. still, important deficiencies remain. for example, in 2001 - the most recent date for which comparative global information is available - the most prevalent disclosures covered accounting and presentation policies, on a bank ’ s capital structure and its measures of capital adequacy, and, for those that had them, on the kind of market risk models the bank used. few banks disclosed much about their credit risk models, the types of credit risk mitigation techniques that they employed, or even the external or internal ratings assigned to their credit exposures. the relative paucity of data available publicly on a typical bank ’ s credit risk profile appears inconsistent with the fact that, for most banks, credit risk remains the single most important source of potential losses. at present, market participants seem to know only little about the extent of most banks ’ exposure to credit risk. one could conclude that it seems unrealistic today to assume that they have enough knowledge of a bank ’ s position to exercise properly a benign influence on its handling of credit risk. disclosure practices do not seem to have kept pace with the very rapid evolution in the ways that banks take on, measure, and ultimately manage their risk positions. incorporating market discipline into the new basel accord to improve the ability of markets to contribute to greater stability in the banking sector, the new accord will contain a series of disclosure requirements. the committee views pillar 3 as a further refinement of accounting standards requirements as they should apply to banks in the light of the specific risks they face. some of the requirements may furthermore be tied to a bank ’ s eligibility for adopting an advanced approach to credit or operational risk or for recognising the benefits of particular instruments and transactions in mitigating risks. we based our decisions on the information that should be disclosed on the following principles :