In June the evaluation exercise was completed, enabling an estimate of the capital needs for the whole system to be made, and confirming that they were clearly below € billion; at the end of August the Royal Decree-Law on credit institution restructuring and resolution was approved, constituting a new code in this area; at the end of September the exercise was completed, enabling the capital needs for each of the banks participating in the exercise, which accounted for 90% of the Spanish banking system, to be determined; and, last Thursday, the Decree which will regulate the activity of the Asset Management Company for Assets Arising from Bank Restructuring (SAREB) was approved, another key step in the implementation of the programme agreed with the European Commission. The analysis concluded in September enabled the classification of banks for restructuring purposes to be confirmed. Previously, the banks without additional capital needs had already been determined (Group 0) as had the banks controlled by the FROB (Group 1), to use the terminology of the Memorandum of Understanding; this classification was completed, dividing the other banks with capital needs into: a) those with plans to achieve the capital levels required using their own means; and b) those which will require State aid to do so. The latter were requested to provide restructuring plans which are currently being studied.
There can certainly be no doubt about the attitude of the European Central Bank. Those who had doubts in the past must have now changed their minds. The second line of action concerns financial markets. On this matter there is now a precise action plan, agreed at international level within the framework of the Financial Stability Forum. Within 100 days a number of regulatory, and self-regulatory, measures need to be approved, aimed at improving transparency and risk management. Among these measures some are particularly relevant: the introduction of standards for disclosing the exposure to off-balance sheet items; asset valuation methods where the underlying asset is illiquid; more generally, a higher degree of transparency for banks’ exposure to structured financial products. Rating agencies are called upon to improve their evaluation and to reduce possible conflicts of interest. As far as regulators are concerned, more international cooperation is required, for example through the creation of a “college of supervisors” for large and global financial groups. The third priority is to tackle the problems related to global imbalances, together with other main players of globalisation in the relevant bilateral and multilateral fora. Globalisation cannot be stopped. Governments must act, within the framework of existing rules. In this regard, Europe has a major responsibility. Concerning international trade, Europe can only gain from the completion of the Doha round, so that WTO rules are respected, particularly regarding intellectual property rights.