before 1 january 2014. under the draft bill, and without prejudice to the framework resulting from the entry into force of the single supervisory mechanism, the banco de espana will retain its current power to authorise the exercise of banking activities. moreover, it will receive additional powers, such as that to revoke banking licences. regarding the regime governing the purchase of qualifying holdings in credit institutions, the banco de espana will continue to be the authority responsible for assessing the proposals of potential purchasers, although now there are plans to give it powers of supervisory intervention, senior officer replacement, suspension of voting rights or, in extreme situations, licence revocation. as bank supervisor, the banco de espana will continue overseeing compliance with organisational and disciplinary regulations. to this end, the draft bill maintains its existing inspection and verification powers, although with some changes, such as that requiring the banco de espana to carry out yearly stress tests on supervised institutions to evaluate their solvency. additionally, in the context of the banco de espana ’ s prudential supervisory tasks, the draft bill equips it with certain tools envisaged in eu legislation, including the so - called pillar 2 measures such as additional own funds requirements, limitations on dividend distribution, restriction of certain activities and limitation of variable compensation. the banco de espana will also be empowered to set the “ additional capital margins ” envisaged in the draft bill. the banco de espana will continue drawing up supervisory guidelines. as a new development, it is envisaged that, if institutions ’ conduct does not comply with the guidelines, they will, if required by the supervisor, have to explain the reasons for such non - compliance. in the area of sanctions, the banco de espana retains its current powers, independently from the powers which may at any time be exercised by the european central bank within the framework of the single supervisory mechanism. against this background, significant changes were made which generally strengthen the regime currently in force. finally, the draft bill endows the banco de espana with supervisory, inspection and sanctioning powers in respect of compliance with obligations to offset, notify and reduce risks associated with the use of otc derivatives. to conclude : 2014 will, as we all know, be an extremely intense year as far as international financial regulation and supervision are concerned. there will be no lack of work. my best wishes to all of you and good luck. thank you. bis central bankers ’ speeches

too low, especially from the viewpoint of certain exporters and importers. more recently, however, and certainly here in montreal, some of the discussion has focused more on whether a floating currency is the right exchange rate regime for canada. this particular debate has been kindled by the advent of the euro and its adoption by 11 members of the european union at the beginning of 1999. i entered that debate early in 1999, arguing that the introduction of the euro was a remarkable achievement, but that it did not provide a useful role model for canada and for our position in north america. since then, with increased interest in the subject internationally, there has been considerable discussion of exchange rate alternatives for canada and for other countries. in canada, the debate about exchange rate regimes has been mainly among academic economists. but, with the decline of our currency against the us dollar through the 1990s, the exchange rate has also been raised as a concern in the business community when comparing our less - impressive economic performance with that of the united states. outside canada, the debate on exchange rate regimes has also become more active, especially in parts of latin america that have had a long history of high inflation and exchange rate crises. indeed, in some of these countries, commentators have argued in favour of the outright adoption of the us currency. today, i would like to return to the issue of the right exchange rate regime for canada. having again considered the advantages and disadvantages of our current arrangements, i can tell you at the outset that i remain convinced that a floating exchange rate continues to make sense for us at this stage of our history. i propose to examine the different sides of the argument with respect to a floating currency in as simple and straightforward a manner as possible. the transactions costs of a floating currency when the amount of cross - border trade and financial transactions is as large as ours is with the united states, the need to exchange currency raises the cost of such transactions. moreover, if the currencies involved are floating, so that the future level of the exchange rate is uncertain, there is also a foreign exchange risk to consider and to hedge against. for example, investors and borrowers must take into account not only the level of interest rates in canada and the united states, but also potential movements in the exchange rate over the term of their investment or loan. so, yes, there are certain transactions costs in having a separate currency. a fixed exchange rate between the canadian and us currencies, such as we had