Financial stability 10 years after the crisis
Ten years after the crisis broke, has financial stability improved? In the opinion of Ricardo Gómez Barredo, Head of Accounting & Supervisors at BBVA, “clearly, we have come a long way,” but adds “regulation will have to continue to adapt itself to the new demands to ensure a level playing field for everyone”.
Ricardo Gómez Barredo was taking part in the workshop ‘Regulation and financial stability, 10 years on’ organized by the Master in Banking and Financial Regulation program of University of Navarra and the law firm Cuatrecasas. Gómez Barredo shared this round table with Jaime Caruana, the former General Manager of the Bank for International Settlements (BIS); José Sevilla, the CEO of Bankia and Alberto Calles, a partner at PWC. The focus of the conference was an analysis of whether ten years after the start of the crisis the reforms put in place had improved financial stability. The challenges and opportunities facing the banking sector in the current environment were also addressed.
Jaime Caruana, believes the financial sector has entered a “new more favorable phase in which a tailwind is starting to blow”. Ten years after the crisis, “the banking sector has notably improved its solvency and resilience” but “we have to be cautious and evaluate future risks”. This behoves the sector to “seize the moment” but “not let its guard down in face of the challenges” such as digital transformation.
Ricardo Gómez Barredo went over the impact digital transformation is having on the financial system. He explained it is important for the banking sector to maintain its essential “role as a firebreak” in its capacity to channel financial surpluses and deficits and to assume and manage credit risk, which is what differentiates banks from other institutions offering financial services.
From left to right, Fernando Mínguez, partner at Cuatrecasas; Ricardo Gómez Barredo, Head of Accounting & Supervisors at BBVA; José Sevilla, CEO of Bankia; Jaime Caruana, former General Manager of the Bank for International Settlements (BIS); at Alberto Calles, partner at PWC.
The BBVA official later discussed the challenges the sector has to face in this new environment. He mentioned the need to develop a new relationship with customers whose expectations and demands are different from those of one decade ago. According to Gómez Barredo, it is essential to pick up the pace of adaption to new technologies marked by constant and disruptive advances.
In the opinion of the BBVA director of Accounting & Supervisors there are two ways for the sector to increase profitability: enhanced productivity, that is, being able to deal with more customers with the same cost structure and improving customer service and experience to strengthen client links with the bank.
The experts concluded that after 10 years of regulatory reform, financial institutions are stronger. There is a new competitive environment with new entrants in which it is essential for institutions to achieve greater profitability.