Luis M Linde: The regulatory responses to the crisis Speech by Mr Luis M Linde, Governor of the Bank of Spain, at the Fundación de Estudios Financieros, Madrid, 22 May 2014. *  *  *  Good morning and many thanks to the Fundación de Estudios Financieros for your kind invitation. Let me start by recalling that just three years ago I contributed to another book of the Fundación, on the international financial crisis, as we then saw it. As Governor of the Banco de España and erstwhile collaborator of the Fundación, it is a pleasure for me to participate in this presentation. Knowing the authors’ profile, I have no doubt the book will make us reflect on how to enhance our financial culture and also on the much-needed recovery, following the crisis of confidence in the financial sector. ******* My intention today is not to talk once more about the crisis and its causes. I would rather focus on the regulatory consequences of the crisis which, as we all know, have been farreaching and which we cannot consider as complete. That crises should have regulatory consequences has been a fairly frequent occurrence in financial history.
Here it is essential that practitioners such as risk experts, auditors, consultants and the supervisors themselves should strive to learn of and transpose all these regulations to their daily duties. I believe it is time to reflect on our subject today in something of a critical frame of mind. I have some concerns over the scope of the new regulatory arrangements. By way of example, the transposition of Basel III to the European Union has required almost 700 articles, many of which not only involve notable technical complexity, but also entail the promulgation of extensive technical standards and additional supervisory guidelines for better implementation. Just as banking industry practitioners face the challenge of implementing and applying this regulatory agenda, the challenge to regulators and supervisors is to reflect on how to square effective regulations with a framework that should ideally be simpler and more transparent, since the effectiveness of the new regulations will also hinge on this. Thank you. 4  BIS central bankers’ speeches