September 22, 2020

The Governor of the Bank of Spain will chair the Basel Committee | Economy

The Governor of the Bank of Spain will chair the Basel Committee | Economy



Pablo Hernández de Cos, the governor of the Bank of Spain has been named president of the Basel Committee on Banking Supervision by the governors of the central banks and those responsible for the supervision of the member countries. You will combine both tasks. He will replace Stefan Ingves, who has held the position since 2011. He will be the second Spanish to head this body, since Jaime Caruana, former Bank of Spain governor, held the same position between 2003 and 2006, just before become president of the BIS, the International Bank of Payments.

The Basel Committee on Banking Supervision (BCBS) is the main international regulatory body for the prudential regulation of banks and it constitutes a cooperation forum on banking supervision. It establishes norms for prudential regulation and supervision of banks and expects full application of its rules by members and their banks with international activity. However, the BCBS standards are minimum requirements and are not mandatory.

The Committee began its activity in 1975 and the Bank of Spain has been a full member since February 2001. Currently, it comprises 45 members (central bank governors and authorities with responsibilities in banking supervision) from 28 jurisdictions, in addition to by 9 observers, which include both jurisdictions and international organizations.

The Committee's mandate, according to the agency itself, is to improve regulation, supervision and banking practices throughout the world in order to strengthen financial stability. Among its usual activities, is to exchange information on the evolution of the banking sector and financial markets, in order to detect current or incipient risks for the global financial system; establish and promote international standards, guidelines and good practices in banking regulation and supervision; and monitor the application of standards.

This body also establishes global banking regulation and supervision standards, guidelines and best practices, also addressing regulatory deficiencies that may pose risks to financial stability.

The Committee has played a central role as a promoter of regulatory reforms after the crisis. In December 2017, the finalization of the new regulatory framework, commonly known as "Basel III", was approved. Its implementation is one of the central elements of the Committee's current work plan.

Pablo Hernández de Cos was appointed governor of the Bank of Spain on May 31, 2018. It was one of the last decisions of the Government of Mariano Rajoy and he promised his position already when in the Executive was Pedro Sánchez, 11th June. It was the former Economy Minister, Román Escolano, who proposed him to the post a few days before to relieve Luis Linde, who was finishing his term. Hernández de Cos, who until then was general director of Economy and Statistics of the Bank of Spain, is expected to be in charge of the institution for six years. Madrileño, 47 years old, has a degree in Law and a PhD in Economics and was an advisor to the Executive Board of the European Central Bank (ECB) between 2004 and 2007.

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