Pablo Hernández de Cos: The state of EU financial integration- the role of global standards

Remarks by Mr Pablo Hernández de Cos, Governor of the Bank of Spain and Chair of the Basel Committee on Banking Supervision, at AFME/OMFIF European Financial Integration Virtual Conference, 15 June 2021.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Thank you for inviting me to deliver this address for your conference today.

The theme of the conference – European financial integration – is both a timely and timeless one. On the one hand, the pandemic has further underlined the benefits of previous initiatives related to financial integration in Europe, most notably the banking union and its core components. On the other hand, the past year has also refuelled longstanding debates and discussions on the need for European further financial integration.

Yet a prerequisite for a successful and enduring financial integration at the European level is for Europe itself to be aligned with global financial standards in order to achieve a truly global level-playing field.

As such, my remarks today, which are primarily in my capacity as Chair of the Basel Committee, will focus on the crucial importance for Europe to implement the Basel III framework in a full, timely and consistent manner.

Financial stability is a global public good. In a world with integrated financial markets, preserving global financial stability requires global minimum standards that are applied consistently and in full by all jurisdictions. This was indeed the motivation for initial Basel standards in the 1980s following the Latin American debt crisis. And it remains just as important today.