I hope to be up to the task of the legacy you are leaving us. My thanks, too, to the members of the Bank’s Executive Commission and Governing Council and, most particularly, to the Deputy Governor, Javier Alonso. Javier, your help and far-reaching knowledge of the Bank are making these first weeks in the job easier for me. But, above all, I should like to thank my colleagues over the course of the years. It would be impossible to list them all; many are here today. The career of a Banco España employee can only fully be understood through the prism of the numerous interactions and discussions between us, which are the bedrock on which we build our knowledge and our particular human capital. It is a privilege to be part of this environment and to participate in such an enriching process. Finally, the most singular thanks are for my family. Without them none of this would have been possible. Let me seize this opportunity to refer briefly to what should, in my view, be the two main objectives of the Banco de España at this juncture and which are related to our relevance and reputation. The first has to do with our insertion into the Eurosystem and into the Single Supervisory Mechanism. Some think this means that the Banco de España has an increasingly diminished role, given that the main functions linked to monetary policy and supervision of the financial system are decided in that framework.
What might this development then imply? Consider the following three areas: supervision, deposit guarantee systems and crisis management. Supervision. There are good reasons for banks to expand through branches and so be able to slim down their own internal bureaucracy, and have a single point of contact with supervisors and a substantially reduced reporting burden. But would this be accepted by national authorities? Home supervisors would become responsible for banks with in some cases a systemic presence in foreign markets. Host supervisors would find themselves legally limited in supervising even systemically important institutions in their own domestic market. The traditional home-host principle simply does not work for systemically important branches. The fact that we have not yet seen much of cross-border branching indicates there are some “invisible” barriers. One of these barriers probably is scepticism from national supervisors. With a few exceptions banks still expand through subsidiaries, which is costly and makes synergies hard to realise, and thus hampers integration. Can we find a way to secure financial stability without limiting the positive drive for further integration? Deposit Insurance Guarantees. Minimum standards are set by the EU, but in practice the national guarantee systems differ widely. Notwithstanding the existence of limited deposit guarantee systems, for larger banks the government will probably have to pay up the main part in the case of problems, due to lack of funds. This might be politically acceptable as long as depositors are domestic residents. However, cross-border branching extends the government guarantee to deposits of foreign residents.