The four Directors-General of the ECB responsible for supervision have already been designated, one of whom is the current Director-General of Banking Supervision of the Banco de España, which is a cause of satisfaction for our institution. The selection processes for the remaining management positions will continue over the coming months. Thanks to the work by several groups of experts, two essential pieces of the future mechanism are at an advanced stage. These are, namely: the Framework Regulation that will define the supervisory function, its internal organisation and the assignment of responsibilities among the various authorities making up the mechanism; and the supervisory manual, which will precisely set out the procedures to be followed by all the members of the mechanism, including naturally the supervisory personnel of the national authorities. The ECB and the national authorities are also working on developing the comprehensive assessment of credit institutions in the participating countries, which began last November and will be completed before the ECB assumes supervisory powers. This assessment will include an asset quality review, performed with the help of auditors or external consultants, and subsequent stress tests, which will be conducted in collaboration with the European Banking Authority (EBA).
In particular, the acceptance of the principle of transnational mutualisation of financial risk in Europe, although implemented very gradually and limited to funds contributed by the industry, is essential to ensure the homogeneous treatment of banking risk throughout the EU. Above all, from a broader standpoint, the agreement means that a significant political obstacle to extending the risk-sharing framework has been overcome. This will very likely pave the way for more significant progress in European integration in the future. Let me finish by noting that in recent economic history it is difficult to find bouts of regulatory reform as intense as at present. Globally, the unprecedented costs of the banking crisis for citizens as a whole have spurred major regulatory changes designed, firstly, to tighten up prudential regulation so as to reduce the likelihood of fresh crises in the future; and, secondly, to develop new resolution regulations to lower and allocate more fairly the cost of maintaining financial stability. In Europe the application of the regulatory reform coincides in time with a far-reaching institutional change which has to lead to the creation of a banking union. And, in Spain, all these important regulatory and institutional changes are taking place against a background of deep reform of our financial sector which has involved the clean-up of balance sheets, the recapitalisation of vulnerable banks, progress towards greater consolidation of the industry and enhancement of regulations, particularly those governing savings banks.