Of course, the Board has to be duly informed, and some of their members should have the necessary expertise to assess these risks. Needless to say, it is not only banks that need to “catch up”; we are also working at the Banco de España to adapt to this reality. I believe it is fair to acknowledge that this is all very new for everyone in the banking sector, including certainly Central Banks and Supervisors. What are we doing? Firstly, we have created an internal function entrusted with assessing the impact we as an institution have on the environment. The aim is to identify and coordinate the necessary measures to reduce that impact. Secondly, as a macroprudential supervisor, we clearly need to be able to assess and quantify the risks that the transition towards a more sustainable economy poses, both for individual banks and the financial sector as a whole. We must be able to perform stress tests for the financial system overall and define scenarios to be applied by banks individually. 4/5  Accordingly, we are designing internal governance structures and methodologies, actively participating in the cultural shift in the SSM supervisory model. Naturally, we are also evaluating the information and data requirements needed to address this challenge. Thirdly, as investors in the debt markets, we are working to include environmental risk assessment in our credit analysis. A fourth key element is our responsibility as supervisors. We must foster the implementation of these changes in the financial sector. We cannot wait for change to occur.
It is duly assigning additional resources and focusing on the matter more closely. Far from being a passing fad, improving corporate governance should receive priority attention from banks. Not only because of the factors habitually cited, but also because the new environment of transparency associated with IAS and Basel II will simultaneously involve greater market scrutiny, a greater capacity for action by bank managers and, in sum, heightened responsibility for them. My final comments relate to the internal changes at the Banco de España. The year 2002 has also been important in this respect in view of the reforms initiated, which will continue in the coming years. Last year the Banco de España successfully met the logistical challenge of substituting euro for pesetas. While the intensity of this process has diminished, it has nevertheless continued this year. I should like to reiterate my gratitude to the staff at the Banco de España for their efforts and dedication, which have been on a par with the historic significance of this event. 8  BIS Review 31/2003  Likewise, last year saw the start of an ambitious plan to rationalise our network of branches, located in each and every Spanish provincial capital. The restructuring involves acknowledging what is a fact: namely, that many of the services provided by the branches do not -owing mainly to new technologiesrequire a physical presence. And those requiring physical presence can be more efficiently organised through a smaller group of better-equipped logistical centres.