by all the government authorities involved, management cooperation, the reaction of the trade unions and understanding on the part of the general public, there have been no queues or panic at branches and there have clearly been fewer withdrawals of deposits than foreseen. having briefly outlined ccm ’ s current position, let me move on to the ultimate aim of the banco de espana ’ s supervisory decisions. while seemingly obvious, the supervisor ’ s aims are to protect depositors ’ savings and creditors, to avoid market turmoil and to preserve the stability of the financial system as a whole. the objective of the central bank ’ s control is to stabilise ccm, to avoid a liquidity collapse and to manage the institution for as short a time as possible with a view to finding an orderly solution. ultimately, the viability of ccm ’ s future business may be achieved in different ways ( for example, through a merger with other credit institutions ), with the banco de espana currently not ruling out any options. the response to these options will be swift, but not immediate, and will require the collaboration of authorities, financial institutions, employees and creditors. i would not like to forgo the opportunity of appearing before this committee without highlighting some of the messages recently conveyed by the banco de espana. firstly, i would like to reiterate that involving savings banks in the political debate makes it immensely difficult to find flexible and effective solutions. opinions become distorted, suspicions, demands and expectations of the parties involved grow and solutions become increasingly complicated. we should not forget that past experience in spain and abroad shows that prudence and discretion are prerequisites for reducing the costs of possible solutions for troubled institutions. otherwise, we will make the authorities work more difficult and, ultimately, taxpayers will pay a higher price. in finding a solution to the difficulties encountered by ccm, the banco de espana has adhered to its tradition of adopting decisions based solely on the objectives of preserving the stability of our financial system, minimising the cost in terms of public funds and maintaining the availability of sufficient financial services. to conclude, i have personally conveyed to the government and to the main opposition party the need for certain regulatory changes that might notably improve finding solutions in keeping with the principles informing our actions to date, which as you are well aware, were backed by a recently approved parliamentary motion. the purpose of my testimony today is not to debate what must be done in future, since that is evidently the primary responsibility of the government

been designed as a straightforward measure that complements and acts as a floor to the minimum risk - based capital ratio. it aims to provide additional protection against what is known as “ model risk ”, i. e. underestimating the regulatory capital needed further to a calculation using the sophisticated models allowed by basel ii and iii. on the more technical side, there appears to be agreement on the definition and calculation of the ratio, the treatment of derivatives and repos, and operations with ccps. but doubts remain over its final calibration and how it affects certain business models, specifically those most centred on retail activity. the banco de espana has supported the setting of this leverage ratio in pillar 1 on the understanding that it can be a good prudential tool, once correctly calibrated. in this respect, the monitoring period prior to its entry into force will provide information and experience. although european regulations envisage that countries may apply this ratio as they deem fit until its harmonisation in 2018, it is not the intention of the banco de espana, in principle, to bring forward its application. as regards liquidity, basel iii has added new regulatory requirements : a short - term liquidity coverage ratio ( lcr ), and a long - term requirement, the net stable funding ratio ( nsfr ). bis central bankers ’ speeches the short - term liquidity coverage ratio is designed so that banks may have an asset buffer with which to meet their maximum foreseeable liquidity or funding needs over a period of at least 30 days. as what is involved is a safety margin, this ratio might at times of stress be below 100 % of such maximum foreseeable needs, which is the level demanded once the requirements come fully into force. however, if a bank ’ s liquidity - generating capacity stands at below 100 % of the maximum foreseeable needs, it will be obliged to inform the supervisor, with which it will have to agree a plan to regain the 100 % level. the initial design of this ratio is very demanding and, perhaps, not very realistic. the year 2015 was too early a date for its full implementation, and the definition of “ high - quality liquid assets ” or the assumptions of liquidity needs were overly rigorous. hence, in january 2012, the basel committee of central bank governors and heads of supervision revised the accord to widen the base of assets considered highly liquid and to soften the implementation timetable. this regulation is also practically finalised, at