luis m linde : central bank monetary policy, regulatory and supervisory measures closing remarks by mr luis m linde, governor of the bank of spain, at the v international banking conference / grupo santander, madrid, 14 november 2012. * * * let me first thank banco santander, its chairman emilio botin and its chief executive officer, alfredo saez, for inviting me to the closure of this fifth international banking conference. the first of these annual conferences was held in 2008. a review of the matters addressed that year, which now seems distant, and those on the agenda today, reveals a high degree of coincidence. we are still in the management of the post - crisis and the economic situation is, in some respects, worse than it was five years ago. it is worse in terms of growth or, at least, growth prospects, and worse in terms of unemployment or stock market capitalisation. the financial crisis, which began in 2007 in the united states and took on a systemic dimension in 2008, following the lehman brothers debacle, has confronted the developed countries ’ central banks with great challenges. i wish to refer to the central banks ’ response in two specific areas. firstly, in respect of monetary policy. and secondly, in the area of banking regulation and supervision. central bank measures in the monetary area in the conventional monetary policy domain, since there was no inflationary risk over the relevant horizon owing to the deterioration of the economic outlook, the central banks ’ priority has been preventing the disinflationary process in the western economies from translating into deflation. back in october 2008, in a concerted move the central banks of the main economics cut interest rates by 50 basis points, and this was followed by further cuts in late 2008 and early 2009. currently, after an unprecedented monetary impulse, rates stand at one of the lowest points in history. the narrowing of the room for manoeuvre for conventional monetary policy measures gave a leading role to liquidity - provision policies and the implementation of exceptional or non - conventional measures, aimed at ensuring the transmission of interest rate cuts to agents ’ financial costs and to facilitating their access to funding. since the crisis began in august 2007, there have been numerous innovations in monetary policy implementation. these have involved increasing the number of institutions with access to central bank funding ; extending the collateral eligible in monetary policy operations ; lengthening the maturities at which liquidity was supplied to the market ; and public and private asset - purchase programmes ( or loans

jaime caruana : basel ii - the road ahead remarks by mr jaime caruana, governor of the bank of spain and chairman of the basel committee on banking supervision, at the institute of international finance annual meeting, dubai, 21 september 2003. * * * ladies and gentlemen, it is an honour and a pleasure for me to address the members of the iif. in the kind invitation to participate in this meeting, two topics were proposed to me, the first being the economic situation and spain ’ s experience in the euro area, and the second the new basel ii capital accord. i thought that basel ii would be more appropriate, given the very crucial stage we have now reached. but these two topics, the economic situation and the new accord, have suggested to me two preliminary comments. first, while policymakers have long understood the importance of price stability to the health of an economy, in recent years we have all learned much about the concurrent need to promote broader financial stability as well. a number of different episodes of economic crisis and financial disturbance have plainly illustrated the threats that weak financial systems and poorly managed banks can pose to the macroeconomy. this is why i have always stressed that banking regulation should be analyzed not only from a micro viewpoint but also from the macro perspective. creating the right incentives, consistent with good market practices and sound risk management, appears to be an important way of promoting the safety and soundness of the financial system and therefore a good way of sustaining both the stability and growth of the economy. this is not only relevant for prudential regulation ; other areas such as accounting should also be consistent with this broad perspective. this consideration underlines the importance of taking seriously certain concerns such as procyclicality. in my view basel ii goes in the right direction. i am convinced that when banking systems are adequately capitalised, well - managed and risks are correctly assessed within the appropriate time horizon and the financial system becomes more stable, less procyclical, better able to promote sustainable growth, and more resilient during periods of distress. my second reflection is that one of the most significant conclusions of the analysis of the recent economic and financial evolution of the world economy has been the resilience of banking systems in most countries. in my view, this resilience has been the result not just of the presence of sufficient capital in the system, but also of improvements in banks ’ risk management systems. i think we owe the industry a special vote of