Pablo Hernández de Cos: Thoughts on global financial stability and the European Capital Markets Union

Speech by Mr Pablo Hernández de Cos, Governor of the Bank of Spain and Chair of the Basel Committee on Banking Supervision, at the Annual Spanish Capital Markets Conference, organized by AFME (Association for Financial Markets in Europe) and AEB (Spanish Banking Association), Madrid, 13 February 2020.

Central bank speech  | 
28 February 2020
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 |  15 pages

Good morning. 

Let me start by thanking José María Roldán, Chairman of the Spanish Banking Association (AEB), and the Association for Financial Markets in Europe (AFME), today represented by Rick Watson and Richard Hopkin. It is they who have organised this 11th edition of the Spanish Capital Markets Conference and invited me here today. It is my pleasure to share with you some thoughts on matters related to the environment in which financial markets operate.

In my address today, I shall first give a broad overview of the main risks to global financial stability and the various policy actions that policy makers could consider implementing to mitigate them. Secondly, I will discuss recent developments and the way forward regarding the European Capital Markets Union.

The state of play of global financial stability

The global economic outlook worsened during 2019. Indeed, global GDP growth in 2019 is expected to be the lowest since the international financial crisis; in addition, the balance of risks to this growth remained tilted to the downside, mainly as a result of the continuing high level of geopolitical uncertainty. The downward revision of economic forecasts over the past year was across the board; in particular, however, it affected the euro area and emerging market economies.