I shall confine myself to saying that the changes have affected all the elements making up the well-known capital ratio, which is the centrepiece of solvency regulations.3  2  “A sound banker, alas, is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional way along with his fellows, so that no one can really blame him.” 3 Any regulatory ratio is structured on the basis of the definitions of what should eligible for calculation purposes, both in the ratio’s numerator and denominator, and of the level it should reach. The new regulations have changed these three elements of the ratio: (i) the numerator shows a figure for capital calculated in keeping with a new, much more demanding definition; (ii) the way in which risks are translated into weighted assets has been changed in the denominator and various caveats have been added regarding the use of internal models; and finally, (iii) the required ratio level has been raised considerably, and additional "buffers" have been added, inter alia, to cover the risks systemic institutions evidence. 7/13  While the capital ratio is important, it is not by any means the only significant measure. The crisis has shown that focusing solely on one metric may be counter-productive. Thus, other elements have been added. These complement the classic solvency metric, and relate to banks’ liquidity or leverage. Moreover, the focus has been placed on banks’ business model and governance.
There are a wealth of initiatives at present: the G20, the United Nations, the Financial Stability Board and the OECD are all involved. And notable within the EU, undoubtedly, is the European Commission’s action plan on sustainable finance. In the case of Spain, we should mention the Draft Climate Change Law. In the central banking and banking supervisory milieu, I would mention the work of the Network for Greening the Financial Sector (NGFS). We participate actively in this network, which has just published its second report. This includes best practices for boosting the role of the financial sector in complying with the Paris Agreement. Banks themselves are increasingly joining ethical or responsible banking initiatives, observing international principles that not only look at environmental sustainability aspects, but also at the social impact of investments. The development of so-called “sustainable bonds” is also being encouraged. These are much in demand by investors, for which a growing market is being created. We should be mindful that compliance with the Paris Agreement goals necessarily entails very substantial changes in our productive model. Clearly, too, to be successful, any transition of this type must include far-reaching measures and instruments that affect practically all economic agents, not only credit institutions. 12/13  However, banks can and should play a key role in this transition. At the start of my address I talked about the fundamental role of banks as a necessary filter for distinguishing between viable economic projects.