16. 11. 2018 remarks - first panel : “ central banks, macroeconomic stability and economic growth ” banco de espana and european institute of the mediterranean with the support of the central bank of tunisia pablo hernandez de cos governor in this first session of the conference we will focus on the role of central banks on both shores of the mediterranean in contributing to the achievement of sustainable growth in the long term. before giving the floor to our distinguished speakers, let me say a few words about the current global outlook and their implications for economic policymaking. at present, the global economy seems to be approaching its cyclical peak while the process of monetary policy normalization in the advanced economies continues, particularly in the united states. this process should normally precede the tightening of global financial conditions. at the same time, tensions in international trade remain, with the risk that disputes in this area will be solved with a greater use of protectionism to the detriment of a multilateral approach to the resolution of these conflicts ; and, elsewhere, the markets of some emerging economies that had significant macroeconomic imbalances have undergone episodes of severe turbulence. we are therefore facing a phase of growth moderation with limited scope for economic policies. it would seem necessary to harness the current moment in which growth records are still satisfactory in order to generate margins that allow a certain countercyclical gearing of economic policies in the future. in the fiscal area, the post - crisis recovery has not been accompanied in a significant number of countries, advanced and emerging alike, by a sufficient reduction of structural deficits in public accounts and the halting of the process of rising public debt. more generally, in many cases it may be necessary to move forward with fiscal reforms that seek to reduce the distortions to growth while allowing the most vulnerable sectors of society to be supported more decisively. the limited fiscal space available is exacerbated in the longer run in many economies, principally but not exclusively the advanced countries, owing to the adverse demographic prospects. ageing populations pose significant challenges for public finances, as they bear on both the revenue and the expenditure sides. on the expenditure side, ageing will considerably affect pension and healthcare spending which, in many cases, will require rethinking pension systems to guarantee their sustainability. on the revenue side ageing leads to changes in the composition of tax bases as it does to lower labour income shares, to capital deepening and to changes in the composition of consumption. in the area of monetary

order for these types of models and databases to be accepted under irb approaches. conclusion as we can see, there are a fair number of open topics on the table as regards basel ii implementation. many of them already existed under basel i, but now we have a much better idea of their size and nature, and have created better structures and processes to address them. since work started on the application of the new capital recommendations, the committee members and the supervisory community as a whole have made considerable progress in understanding and resolving difficulties, and along the way we have improved the level of cooperation and trust between supervisors, as well as the level of communication and mutual understanding with the banking industry on such sensitive subjects as the management of risks and capital. the reality we supervisors are facing was already complicated even before the introduction of basel ii. but now the quality of our knowledge and the way in which we handle the risks and challenges have improved thanks to the revised framework ’ s introduction. i would say that all of this is, in my opinion, positive. i would like once again to extend my thanks to asba and the fsi. i have always found it very useful, instructive and a genuine pleasure to participate in the events organised by both of these institutions, so today is a double pleasure, and i would like to thank everyone for the excellent collaboration that we have built up over the past few years. thank you very much.