spanish credit institutions, with a traditional business model based on long - term relationships with retail customers, are more sheltered from this complexity than other international banks that are more active on financial markets and have deeper interactions with the markets. but in a globalised world with complex interrelations, we can no longer think solely in national terms. and especially when our financial system finances its ordinary activity not only through its spanish customers but also with funds raised on the european market. the growing integration of the single financial markets can now be seen in many facets. first, some market segments, of particular importance for spanish institutions, already enjoy full integration, and talking of the spanish environment in this connection is meaningless. the integration of the interbank markets, the public debt markets and the markets for subordinated debt and preference share issues is, quite simply, complete. in the market segments of high - volume business financing, and equities, the degree of integration in the recent period has been substantial. and in other markets, such as retail banking, a lesser degree of integration is compatible with growing cross - border competition through m & as or branches and subsidiaries. in addition to this there is the practical importance and potential impact that european regulations emanating from brussels have for spanish institutions. such regulations include most notably the ifrss ( international financial reporting standards ), the new capital requirements directive ( the basel ii directive ) and the markets in financial instruments directive ( mifid ). on the basis of all these elements, the conclusion is that the prudential supervisor of spanish credit institutions cannot disregard the growing practical importance of the european environment, which precludes thinking in strictly spanish terms. this is so with regard to the diagnosis of institutions, to the risks they face in the medium and long run, and to the instruments they have to mitigate such risks. traditionally, the spanish supervisory model has been able to combine a demanding stance in respect of institutions ’ risks with incentives for best - practices management. this has positioned spanish institutions among the most efficient and profitable in the world, and the spanish economy has benefited from a highly competitive financial system. in the coming years the challenge is successfully to transmit these values in the european context, but also to assimilate the best international – and specifically european – supervisory practices. we must allow our institutions to harness the benefits the single financial market can offer them. accordingly, in overseeing our institutions, we should limit the inevitable cost all supervision entails, applying prudential

michael s barr : measuring cyber risk in the financial services sector opening remarks by mr michael s barr, vice chair for supervision of the board of governors of the federal reserve system, at the conference on measuring cyber risk in the financial services sector, boston, massachusetts, 17 january 2024. * * * thank you for the opportunity to welcome you to day two of the second annual conference on measuring cyber risk in the financial services sector. 1 i'd like to thank the staff who organized this gathering from the massachusetts institute of technology, the federal reserve bank of richmond, and the federal reserve board. cyber threats are constantly evolving, and we can expect them to become increasingly disruptive as technology advances and our financial system becomes more interconnected. in the past few months, ransomware attacks have disrupted the ability of some financial institutions to offer a variety of banking and market services, including treasury clearance and settlement and access to online banking and atm operations. these incidents were resolved without significant disruption to the broader market, but they are stark reminders of the potential for cyber incidents to generate broader, even systemic risks, and the importance of addressing these risks. cybersecurity preparedness has become increasingly important for banks. banks must take action to uncover vulnerabilities in their systems and remedy those vulnerabilities before attacks occur. but focusing on cyber defense is not sufficient. it is important that banks also focus on resilience to successful cyber - attacks, including by developing and regularly testing business continuity plans. the federal reserve and other banking agencies work to make sure that banks and service providers are appropriately focused on cybersecurity and operational resilience. supervisors will continue to reinforce the need for appropriate risk management. reliance by banks on third - party service providers has grown considerably in recent years, and with that reliance comes the potential for greater cyber risk. 2 it is ultimately the responsibility of banks to manage their third - party risk, and we have historically seen gaps in this regard. last year, together with the other bank regulatory agencies, the federal reserve adopted guidance on effective management of third - party risk, based on the size and complexity of the bank and nature of the third - party relationship. the guidance provides some specific examples throughout the lifecycle of a third - party relationship, which should be helpful for banks as they strengthen their management of these risks. forums like today's conference are critical to improve how we think about and measure the presence of cyber risk in financial markets. the ability to