mind the effect of the bank prudential requirements on the supply of credit for financing the economy and, therefore, on activity and prices. therefore, given the evident interaction between the realms of monetary policy and of prudential policy, it is essential that the principle of separation between them should be applied with the appropriate measures of flexibility and pragmatism. in the case of the relationship between prudential oversight and resolution measures, the need for coordination is even more marked. the regulation governing the creation of the bis central bankers ’ speeches single resolution mechanism confers on the latter not only the management of orderly resolution processes for ailing institutions, but also the prerogative to initiate the process by declaring an institution non - viable ( a competence it shares with the supervisor ) and, to this end, it empowers it to gather all the information it needs and to conduct its own inspections. that is to say, without appropriate coordination, there is a risk that vulnerable institutions – which are naturally those that require more attention by the prudential supervisor – may be subjected to the dual scrutiny of the two agencies, and that discrepancies and frictions may emerge that may complicate the task of maintaining financial stability. fortunately, so far, there is patent goodwill to reach an understanding between the european authorities responsible for the single resolution and supervision mechanisms, which will shortly take the form of a memorandum of understanding between the two that will contribute to attaining the required coordination. what has still to be done in spain? the institutional framework of supervision in spain has evolved so as to adapt to the new european and global regulatory framework, and to the establishment of the banking union. that said, the task is not yet complete. in respect of macroprudential policies, the banco de espana has, as a result of the new regulations on capital requirements, assumed the competencies over the potential activation of macroprudential instruments that involve actions related to credit institutions. indeed, last december, the central bank adopted the first decisions in this respect entailing the identification of institutions considered systemic at the domestic level, the determining of the additional regulatory capital required of each of them and the setting of the countercyclical capital buffer envisaged under the regulations. given the current cyclical position of the spanish economy following the sharp contraction in gdp and credit levels since 2008, the buffer was initially set at a level equal to zero. however, spain is still lacking a macroprudential committee or

adrian orr : opening statement to the finance and expenditure committee opening statement by mr adrian orr, governor of the reserve bank of new zealand, to the finance and expenditure committee ( fec ), wellington, 7 february 2024. * * * tn koutou katoa, and thank you chair. when i spoke to this committee following the release of our november monetary policy statement, i explained why the monetary policy committee had agreed to maintain the official cash rate ( ocr ) at 5. 50 %. in short, consumer price inflation at 4. 7 % remains too high, and we remain wary of ongoing domestic inflation pressures. the ocr remains at a restrictive level to slow spending growth in the economy and reduce inflation pressures. the monetary policy committee will be giving its full assessment of the latest economic data at our february monetary policy statement, due out at the end of this month. it is worth noting that this will be the first reflecting our new remit. you've just heard from the bank regarding our november financial stability report. i won't repeat what has already been covered, but i would like to note some other financial stability highlights from the past year. in december we completed our outsourcing policy. this ensures major new zealand banks can continue to operate if their parent bank fails. our review of our insurance legislation continues, and we have published a new interim solvency standard. the new deposit takers act, as mentioned by our chair, will strengthen and simplify our approach to the regulation of banks and other deposit takers, and introduce the depositor compensation scheme. we are well advanced in building the capacity, capability, and resilience needed to support the new legislative expectations. the recent variation to our five - year funding agreement was triggered primarily by the deposit takers bill becoming legislation, as well as progress in some multi - year investment programmes. the likelihood of the variation was signalled at the outset of our current funding agreement. we are progressing investment in the bank's critical infrastructure, including cyber and physical resilience, cash management, investigating a central bank digital currency, enhanced data collection, and more intensive regulatory supervision given our expanded mandate. as a full - service central bank, we work continuously on being cost - effective and fit for purpose. our international comparators highlight we are on course. we work closely with our council of financial regulators partners. we have achieved significant progress on the regime for financial market infrastructures, cyber resilience, and