are putting pressure on banks ’ profitability, in particular, regulatory reforms aimed at addressing vulnerabilities in the global banking system as well as deficiencies in the current framework. bis central bankers ’ speeches some of these reforms have already been implemented and banks have improved their resilience. solvency ratios have been reinforced with a new calibration of the requirements and the definition of the eligible capital instruments for the numerator of these ratios. however, different problems in the denominator related to the measurement of risk still persist and should also be addressed. in this regard, i would say that the major general outstanding issue to finalize the basel postcrisis reforms is how to mitigate the unwarranted variability in the risk weighted assets that are calculated by banks when using internal models. this revision should be feasible by striking a right balance between sensitivity, simplicity and comparability. there is a special focus also on avoiding significant increases for overall capital requirements. this means that, given that we have already reinforced the level and quality of capital for the overall banking industry, the impact on requirements of the current revision should be borne by those parts of the banking system where the major unwarranted low asset densities are located. this objective of reducing the unwarranted variability in risk - weighted assets could be achieved through the implementation of a combined set of measures that ensure risksensitivity and comparability. internal models are being revised with that objective in mind. first, there are some portfolios which should be defined as non - modelable, due to the scarcity of reliable data ( i. e. low default portfolios ). second, among those exposures or risks that are considered as modelable, there are reasons that justify the revision being undertaken on definitions and methodologies. and, third, consideration should be given to the inclusion of restrictions to model parameters as a means to facilitate the supervisory task, so avoiding abnormally low values for individual parameters. in order to limit unwarranted variability in risk - weighted assets, a common backstop that has enough granularity to ensure risk - sensitivity is also needed. in this regard, capital floors based on the standardized approaches and designed as a limit to the output of internal models may be considered. in this regard, the revision of standardized approaches is also relevant. this revision seeks to incorporate the lessons learned in order to increase their risk sensitivity avoiding undue complexity. and last, but not least,

the member state governments have embarked on a thorough revision of the mechanisms for european governance. this process has already yielded some results, including the legislative initiatives adopted in what is known as the “ six plus two package ” ; the treaty establishing the european stability mechanism, the new permanent european crisis - management mechanism ; or the treaty on stability, coordination and governance in the euro area. but the flip - side is that this process has moved forward in fits and starts, it has not enjoyed a broad degree of consensus and it has sometimes failed to be as rigorous and ambitious as the gravity of the situation required. likewise, since the onset of the tensions there has been – occasionally notable – headway in the ongoing adjustment of the most vulnerable national economies, sometimes in step with the strict conditionality imposed under the financial support programmes under way. but here, too, action has broadly tended to be behind instead of ahead of events. bis central bankers ’ speeches in these conditions, it is the european central bank that has positioned itself as the fundamental bulwark against the crisis. and, ultimately, this is buying time for the member state governments, in both their responsibility for domestic economic policies and as co - managers of the common european project, to make resolute progress in resolving the problems at the root of this crisis. we should not forget that the extensive range of non - conventional measures deployed by the ecb since the start of the crisis – the 3 - year ltros being one of the most recent and successful examples here – are, by their very nature, limited over time. and, more important still, these measures do not affect the fundamental imbalances which are ultimately at the source of and responsible for the crisis. unfortunately, the tensions we have once again experienced in recent weeks are a powerful reminder that the crisis is still far from over and that our economy ’ s situation remains a particular cause for concern in europe. and this despite the fact that since the start of the sovereign debt crisis, and more forcefully so in recent months, spain has implemented major reforms. a frequently voiced criticism of the ecb ’ s 3 - year ltros is that such an extremely generous provision of liquidity will tend to mask the underlying problems of the most vulnerable financial systems, thereby weakening the thrust of governments ’ reforms in this area. this has not, of course, been spain ’ s experience. a glance at the measures adopted in spain shows that the process to clean up, restructure and recapitalise