This was due in part to excessively lax supervisory standards, which led to insufficient monitoring of institutions under inspection and to the underutilisation of the information available to supervisors, and which allowed the excessive growth of the “shadow banking system”. Work is now in progress to define and standardise ways in which material information on transnational institutions can be exchanged through so-called colleges of supervisors, which group together the supervisors of the countries where these institutions have a significant volume of activity. Substantial headway has been made in a short time and improved supervisory cooperation at international level and at European level (with the creation of new European supervisory authorities) will unquestionably enable more effective action. BIS Review 51/2010  3  I would like to emphasise here another dimension which the Banco de España considers crucial, namely the improvement of national supervision. The first step in achieving effective international supervision is to ensure high quality national supervision, not only of large institutions, but of the whole system, since systemic risk may flare up due to a mere contagion effect. The second step is to foster the convergence of a majority of countries towards uniform and higher-quality supervisory standards. In this respect, work is commencing on a review of the various national supervisory models with a view to developing principles based on sound supervisory practices.
I am not thinking of the credit problems of SMEs in the short term due to higher risk aversion or to their weakness during the crisis. These problems have been covered extensively in previous addresses and the measures being taken to alleviate them include exceptional and, naturally, temporary programmes such as those of the Official Credit Institute. Here I am not referring to the short term. My concern is that, although it is positive that all the regulatory changes under way seek to ensure that banks will never again cause the serious problems which arose in many countries and ultimately spread to all of them, it should also be realised that those new post-crisis banks will, by definition, be less willing to lend money for business projects with a certain level of risk. Clearly, you can’t remove the punchbowl and expect the party to swing. The purpose of the calibration exercises undertaken is to avoid excessive requirements that stifle the economy. But nothing will prevent the post-crisis banks arising from the new regulatory regime from being much more prudent and focused on traditional intermediation than in the recent past. It will be possible to temper those requirements involving an excessive cost/benefit burden, but it is doubtful that a change enjoying such wide support will be stopped. The fact is that public opinion in the major countries wants the new international regulatory environment to oblige financial institutions to behave as conservatively as necessary to avoid a repeat of the current crisis.