While impact analyses reveal that the reform would increase capital requirements in some jurisdictions, they also show that certain facets of the reform would lower them. Specifically, some of these latter facets have already been implemented via the European quick fix I mentioned earlier.14 The objectives of this second phase of the Basel III reform, which consist of balancing simplicity, comparability and risk sensitivity, remain wholly in place. Thus, after deciding to defer implementation by one year so as to increase banks’ operational capacity, all members of the Basel Committee on Banking Supervision (BCBS) have committed to its full and consistent implementation on the new date agreed. The economy and financial system will thus have sufficient time to absorb the main effects of this crisis and to progressively rebuild their buffers, if they were used. Domestically, the coordinated supervision of the risks to financial stability has been strengthened in recent years through the creation of the Spanish macroprudential authority 14  For example, in relation to the digitalisation of the banking sector, this reform exempts from deduction from CET1 investment in software development, databases and database management; the related amortisation, however, must still be deducted. This is because such investment is considered a basic input for banks to pursue their activities amid the economy’s and society’s growing digitalisation, and for banks to be able to better compete with BigTech firms, which are software asset-intensive.
As the major interface between Europe and the rest of the world, London’s success is not a threat to other European financial centres. I have little doubt that euro activity in London will mean more rather than less euro activity in other European financial centres like Frankfurt, Paris, Milan or Amsterdam. And, conversely, I have little doubt either that what is good for those centres will be good too for the City. Mr. Chairman, I make no apology for concentrating my remarks today on the advent of the euro. It is an historic step; and it will affect the lives of all of us - throughout Europe, throughout the Mediterranean region, and across the world. It can be a powerful force for good through its impact on free trade and competition, and on economic prosperity. But it is not without its dangers. What matters now is that we should all do all that we can to maximise the potential benefits and minimise the risks. BIS Review 29/1998  ˝