How these decisions materialise, which in the literature is known as “risk culture”, is particular to each bank and the responsibility of each one. Supervisors observe and assess but, ultimately, this is one of the idiosyncratic aspects of banks’ DNA. In short, governance structures should be capable of measuring, heading off and analysing current risks and those that are arising. While there are no strong signs of any easing, for activity as a whole, in lending conditions and of aggressive pricing that might suggest that risk is not sufficiently reflected, banks must be careful to retain a suitable profitability/risk trade-off that is sustainable over the cycle in all business segments. An individualised reflection, adapted to the characteristics of each institution. I shall conclude with a brief but nevertheless important reference. In addition to being comprehensive and strategic, reflection on the business model should also be individualised, i.e. adapted to the idiosyncratic characteristics of each institution. Indeed, the findings of the SSM thematic review of profitability and business models show that there is no one single approach and that, even among those banks with better profitability results, there are differences in strategies. Some pursue strategies geared to obtaining high income, which counter relatively high costs. Others place an emphasis on low costs that are compatible with relatively low income. And others strike a balance between a medium income-generating capacity and medium or low-level costs.
09.10.18  Banking business model: challenges and opportunities IX Financial Meeting. “Transformation of the banking industry in a new setting of digital innovation” Margarita Delgado Deputy Governor  Good morning. It is a pleasure to participate in this ninth edition of the Financial Meeting, a classic in our calendar widely acknowledged for its prestige and which gathers together a large number of banking industry leaders. I thank the organisers for their kind invitation to me to speak at the start of the event. And it is a pleasure to follow on from Ramón Quintana, my “brotherin-arms” over the course of intense years of work, first at the Banco de España and then at the European Central Bank. Indeed, in connection with Ramón’s words, and in this my first address as Deputy Governor of the Banco de España, I wish to focus on the banking business model and the need to adapt it to a changing environment. Like all private companies, banks can only survive in a stable fashion over time if they are profitable. And, set against the current transformation of the banking industry, ensuring profitability over time calls for a comprehensive, strategic and individualised reflection on the business model. Allow me to develop this idea of “comprehensive, strategic and individualised”.