14  At the international level, the Basel Committee’s Cross-border Bank Resolution Group has published a report with recommendations to improve the resolution of failing financial institutions that conduct cross-border activities. At the European level, the European Commission has launched a public consultation on the EU framework for cross-border crisis management in the banking sector. As regards derivatives, the aim is to increase transparency and risk management, especially through the creation of market infrastructures to centralise transaction settlement. Another area in which more stringent requirements are to be imposed is that of securitisation and credit derivatives activity. 15 During the crisis, there was a strong decrease in securitisation. For this segment of the market to experience a broad recovery, fundamental changes towards more transparency, standardisation and simplicity are required. There are various initiatives, both public and private, targeting this. The ECB is taking measures in order to gradually align the collateral eligibility criteria and risk control measures with best market standards and investors’ requirements. 16 In the context of the regulatory reform, the international community has committed itself to reducing the moral hazard posed by systemically important financial institutions. A number of proposals are being discussed with international bodies, in particular the Basel Committee and the Financial Stability Board. The debate recently gained momentum following the President of the United States’ proposal to adopt the “Volcker rule”, which aims to separate the activities of large financial institutions.
The element that marks a growing concern with regard to restrictiveness relates to the capital of banks. Clearly, the considerations in respect of the need to replenish capital are starting to exert a strong influence on the decisions of banks to grant new credit. This dynamic is worrying. It indicates that the banking system is interpreting the new regulations restrictively for credit. This approach is undesirable and out of line with the objectives so far followed by the economic policy authorities of supporting the financial system, not as an end in itself but as an essential function of savings intermediation. The outcry surrounding the effects that future capital standards and risk management – the so-called “Basel 3” – will have on credit developments in the short term seems unjustified. The new rules are specifically intended to ensure a more orderly and sustainable flow of credit, not a reduction. Moreover, as I said earlier, a gradual process of adaptation to the new requirements is foreseen. The new capital requirements may be attained in two different ways, although they have opposite effects on banking activities: reduction in banking activities, particularly in credit to firms, on the one hand, and capital increase on the other. The alarm that seems to be widespread in the banking sector concerning the new rules seems to mask the intention of adapting to them via a reduced exposure to the real economy, rather than via a capital increase.