Spanish banks now have more capital than before the crisis, greater capacity to absorb potential “shocks,” and are better prepared to overcome liquidity problems. ECB supervision is stricter and better equipped to identify shortcomings and drive their resolution. Regulation has focused on three objectives: solvency, resolution, and consumer protection. The financial stability achieved is underpinned by a more stable system and improved confidence. However, regulatory changes have not come to an end. It is not possible to eliminate all risks entirely, which has led the authorities to begin the debate on how to adapt regulation to potential risks.
