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Banking 07 Mar 2018

A change of direction for financial regulation

We are reaching the point when the financial system regulation principally dedicated to correcting the shortcomings of the crisis is reaching its end. The approval of Basel III is “good news” and now is the time to implement reforms and make way for economic growth. This is one of the observations of María Abascal, BBVA’s Director of Institutional Relations, in the ‘Women in Finance’ forum.

María Abascal shared her perspective about the banking industry’s regulatory framework in the forum organized by the British embassy in Madrid in collaboration with the newspaper, Expansión, in one of the events leading up to International Women’s Day. In her remarks, she raised three critical themes for the financial sector: prudential regulation, digital regulation, and sustainable finance.

First, she referred to the importance of financial regulation taking a “holistic” view, that it considers the unforeseen impacts of the regulatory framework. For example, she suggested harmonizing national insolvency laws and the banking resolution framework.

On another note, she commented on the challenges faced by regulators with the digital transformation of financial services. In her opinion, the regulatory framework should find a balance between consumer protection on one side and technical innovation and new business models on the other. She also pointed out that regulators should support innovation among all the players (banks, digital giants, and startups) within a secure context. One way to do this is with sandboxes or “test areas” that permit new financial solutions to be examined without putting the system at risk.

María Abascal (BBVA), en 'Women in Finance'

From left, Katherine Braddick, María Abascal, Rachel Kent, Soledad Nuñez and Rocío Sánchez.

The third challenge she sees for regulators is sustainable finance. The United Nations Sustainable Development Goals and the Paris Climate Agreement have raised world awareness about the importance of moving economies towards sustainable models. In this environment, the financial sector is key, María Abascal stressed. Banks can mobilize capital in such a way that investments promote sustainable finance. In the case of BBVA she reiterated its commitment to mobilize 100 billion euros before 2025 to fight climate change.

María Abascal participated in a panel on future regulatory challenges alongside Katherine Braddick, Director General of Financial Services at the UK’s Treasury Department; Rachel Kent, Director of Global Financial Institutions at Hogan Lovells; Soledad Nuñez, Senior Advisor at the Banco de España; and moderated by Rocío Sánchez, Director of Public Policy at the Spanish Banking Association (AEB).

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