pablo hernandez de cos : audiovisual communication competition on financial education speech by mr pablo hernandez de cos, governor of the bank of spain and chairman of the basel committee on banking supervision, at the general council of economists, 4 february 2021. * * * third deputy prime minister and minister for economic affairs and digital transformation, vicechair of the cnmv, chair of the general council of economists, ladies and gentlemen : let me begin by thanking the general economists association for organising this event, which marks the conclusion of the audiovisual communication competition on financial education. let me congratulate, too, the winners, other finalists and participants for their effort, dedication and high - quality work. the competition, like most activities since the onset of the pandemic, has had to adapt to the extraordinary circumstances we are facing. both organisers and contestants have shown high adaptability. the contestants have had to put all their creativity into a digital content. these circumstances also serve to emphasise how financial education can complement the development of other citizens ’ capabilities, particularly those relating to digital skills. clearly, this competition aside, we have all in the last few months purchased more goods and services, including financial ones, through digital channels. this trend will likely continue in the future. to ensure citizens adapt appropriately to these developments, financial education efforts must run in tandem with digital education ones. otherwise, pockets of financial exclusion ( for instance among our elderly ) could arise, or the risks deriving from uninformed financial purchases could be compounded by those resulting from the use of an unknown digital channel. the videos presented have adequately captured the importance of the concept of responsible finance. this was, indeed, the central slogan of the 2020 financial education day. however, not only have they captured the concept adequately, they have also been able to project it towards one of its most important components : responsible consumption. in this regard, i would like to highlight that exercising this responsibility involves all players. first, customers ( all of us ), as many videos have accurately illustrated, must exercise responsible consumption. this requires us to assess our own available resources and borrowing capacity. in short, the idea is to avoid excessive over - indebtedness, which we know generates highly adverse effects that influence our life decisions over an extended period of time. second, such responsible behaviour must be demanded of financial institutions, which should practice what we call “ responsible lending ”. this entails properly assessing the creditworthiness

turn, must incorporate the information into their own decisionmaking processes. this is a process which clearly implies costs, both in terms of time and resources. regulators are one of the stakeholders in this process. in order to fulfil our objectives and functions, we need information from the entities and markets that we supervise. but financial institutions are faced with requirements from other sources too. they have to produce information for a whole range of other purposes, for example to fulfil mercantile, fiscal and statistical requirements, as well as to run their own business, of course. on top of this, changes in the financial markets themselves are having a major impact on information flows. increases in the complexity and volume of financial transactions are contributing to an increase in the complexity and volume of information that entities need to produce and manage, even if only for their own internal purposes. and if we add in the ever more prevalent international dimension, the situation becomes even more complicated. in the face of these developments, it seems important to me that we find new ways to manage the information process. so what can we do, as regulators, to promote the most effective and efficient processes for the generation, transmission and use of financial information, and therefore the most efficient markets? i believe there are five key elements in this process, and it is on these elements that i will focus in the remainder of my intervention. convergence of regulatory requirements the first of these involves starting at the beginning of the value chain of information requirements. in my view, a greater degree of convergence in the underlying regulation which applies to financial institutions and markets will provide us with an excellent basis for making progress on other aspects. let me refer to some initiatives that have been taken in this respect. of course, the first initiative that i must mention is that of international financial reporting standards ( ifrs ). given the importance of accounting data as the basis of information flows, the development and application of these standards is providing a valuable opportunity to enhance the efficiency and comparability of information, especially on an international basis. indeed, with effect from 1 january 2005, all eu listed companies have been required by law to use ifrs for their consolidated financial statements. the significance of this development should not be underestimated. it means that market participants and other interested parties should be able to compare and contrast information relating to companies in different jurisdictions on a like - for - like basis, and thereby make more informed decisions. common accounting standards increase transparency and comparability for investors,