Since the crisis broke out, regulation has become one of the main challenges for banks worldwide. Much of the regulation aims to strengthen financial stability and protect users of financial services.
Regulation has led to banks with more capital and liquidity, and has helped make them safer and better able to deal on their own with any problems that may arise. Rules such as MiFID II, PSD2 and the new accounting standards seek to enhance investor protection, increase competition in financial services, and ensure that banks’ balance sheets reflect the risks assumed more accurately.
Authorities will now focus on the details of this regulation to promote financial inclusion and ensure the sustainability of economic growth. The fine print of regulation will continue to be a challenge for banks in 2018, as will digital transformation, new technology competitors and improving profitability.
Banks’ stock market valuations reflect investors’ confidence that the sector will successfully overcome these challenges. Data on the economic recovery in Europe—stronger than expected, especially in Spain—reflect banks’ efforts to meet their objective: financing households’ needs and business development, which is essential to generate growth and prosperity.
Banks’ path since the crisis broke out has also been shaped by transformation driven from within. Social responsibility has gained weight in decision-making. Improving financial education is another goal banks have set themselves, convinced that it benefits society as a whole.
José Luis Martínez Campuzano, AEB Spokesperson
