The Master's Degree in Banking and Financial Regulation of the School of Economics of the University of Navarra has organized a congress on new banking supervision tools. Pedro Castedo, from the European Central Bank, stressed the importance of these new tools, such as stress tests, to avoid crises such as the one that began in 2008: "We must make progress in European banking integration to reduce systemic risk".

Castedo considers that both the European Banking Authority and the European Central Bank and the different central banks of the countries "are advancing towards banking integration", but he recalled that the European institutional architecture itself, formed on the basis of the legislation of the member countries and not on the basis of a single one, as in the USA, requires "constant work to reduce these differences".

In addition to Castedo, presentations were given by Oleg Shmeljov, from the European Banking Authority; Sandra Wesseling, from the European Central Bank; Juan Serrano, from the Bank of Spain; and Ian Tyler, from Deloitte. The event served as a forum for discussion among European banking supervisors and regulators, financial institutions and academics. All of them have exchanged their views on how to control risk in financial activity through methods such as stress tests. "The aim is to ensure that institutions have adequate back-up capital for their expected level of risk," said Juan Serrano.

Integration of risk control in the management of the financial entities.

The Internal Capital Adequacy Assessment Process (ICAAP) is a fundamental tool of banking supervision and management to arrive at the Single Supervisory Mechanism for European banking sought by Eurozone policy makers. The ICAAP is set to be an important source of information for governance decision making in financial institutions: "All Eurozone banks should follow this protocol to allocate adequate capital from agreement to their risk profile , so as to reduce the chances of a system failure due to excessive indebtedness," explains Germán López-Espinosa, director of Master's Degree in Banking and Financial Regulation.

"ICAAP is more than an economic model , it is a formal and systematic process to improve the identification and calibration of the risks faced by financial institutions. And all of this in a permanent way, as a monitor," notes López-Espinosa. The implementation of this tool is the task of financial institutions, which should integrate it into their daily management and make it part of the decision-making process in the institution's culture.

In addition to professors from School of Economics at the University of Navarra, representatives from the country's main banking institutions, including BBVA, Bankinter, Sabadell, Kutxabank, Citibank, Santander, Caja Rural, Bankia, Banco Popular, La Caixa, Ibercaja, Unicaja, among others, attended the event at Campus BBVA de La Moraleja, where congress was held. Also consulting firms, such as Deloitte and KPMG.

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