During the boom years, the Bank of Spain's practice of demanding compliance with fairly strict financial -regulations led many experts to -criticise its approach. Such supervision was decadent and old-fashioned, they said.Of course, times have changed. As the world's banking system unravels, regulating financial activity is now seen as a good thing. As we await the return of far stricter supervision, the Spanish model is, all of a sudden, being cited as a model of prudence and restraint. While financial activity in most Western countries has grown ever more innovative and complex over the last decade, Spain's banking system remained traditional, relying on conventional practices. The Bank of Spain never liked the idea of recording credit risks as off-balance sheet transactions, frequently disregarding structured vehicles. It also demanded higher levels of equity from borrowers than many other regulators.
December 10, 2008 at 06:32 PM
1 minute read
The original version of this story was published on Legalweek
Strict rules prevented Spanish banks from being swept up in the excesses of the last few years. They are now reaping the benefits, says Juanjo Lazaro
During the boom years, the Bank of Spain’s practice of demanding compliance with fairly strict financial -regulations led many experts to -criticise its approach. Such supervision was decadent and old-fashioned, they said.
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