“The time for Basel IV has passed; we must start building Basel V now,” stated our president, José María Roldán, during his speech at the 24th Annual European Financials Conference organized by Goldman Sachs.
“When I speak of Basel V, I mean that this crisis, perhaps the largest we have experienced, gives us the opportunity to see what works and what does not work in the current regulatory framework in aspects such as countercyclicality, the simplicity of rules, their relevance, or the effectiveness of measures to prevent arbitrage by the shadow financial sector,” he explained.
Regarding procyclicality, the AEB president explained that banks currently have too many different capital buffers, and this may hinder their use. With respect to liquidity, he questioned whether the buffer known as LCR will ever be used, and regarding regulatory complexity, he advocated for reviewing current regulations such as the costly and complex MiFID 2.
Furthermore, Roldán emphasized that the entire resolution regime has been suspended “de facto” as it does not appear it will be used for now. “Perhaps we can design cheaper alternatives, such as special insolvency regimes for banks,” noted the AEB president.
On arbitrage, he said that “looking ahead, we must ensure a level playing field to compete with shadow banks and large technology companies. When crisis strikes, banks are the only ones stepping up to finance the real economy. As you can see, there are many lessons to be learned from what is happening.”
José María Roldán, Chairman of the Spanish Banking Association
