 Good afternoon. I would like to thank the Institute of International and European Affairs for the invitation to participate in this panel about the future of European banking. As it has been mentioned, I am the Director of Banking Supervision in Spain, so I'll give, regarding this topic, a supervisory approach from a peripheral country. It's obvious that the future of the sector is framed within the new regulatory system, both on international and European level. In the current situation, there are many challenges for banks that banks are facing. I will focus on some particular aspects. The first will be several elements of the new Basel III framework, the capital, the leverage and the liquidity ratio. I will talk a little bit about GEC fees, a little bit about the European resolution framework, although it's going to be touched upon in the next session. And as well, I will mention, but very briefly, the comprehensive assessment. Regarding Basel III, I would say that the reforms of prudential rules demand of banks a minimum level of high quality capital, accompanied by a simple leverage ratio and by stricter liquidity ratios to simplify. This means that for the first time, and although it was a particularly of capital that was assessed by analysts, but it didn't have an impact on regulation up to now, we will have at least a 7% of these weighted assets of minimum capital, including the compensation buffer. In addition, there will be a compensation buffer of up to 2.5%. This obviously will introduce an important new element for banks and we will have to cope with it. In terms of figures referred to December 2012, the new regulation implies that the Common Equity Tier 1 would decline according to, I suppose you know, the EPS report regarding the figures of December 2012. As I said, the Common Equity will decline from an average ratio of 11.5% under the current rules to an average of 8.4% fully loaded. So this means a very important decline of 300 basis points. Nevertheless, the 73% of the banks comply in this report, I am talking about the 40 largest banks in Europe, comply with this 7% of Common Equity Tier 1 already fully loaded, showing a hypothetical capital shortfall of 70 billion. The good piece of information is that this figure 18 months ago showed a deficit of 230 billion. So this means that more than three times, this means that banks are doing the work and in this difficult situation increasing the capital. The new regulation establishes a transition period that finalizes, as you know, in 2019. The aim of using this calendar is to prevent the strengthening of banks' solvency from being achieved at the expense of a reduction in the financing that banks provide to the economy as a whole. However, it's true that there is pressure in the markets for banks to comply ahead of schedule with the requirements laid down in Basel III. Banks should therefore use the room for maneuver they have to strengthen the capital, dispelling any existing doubts about their ability to comply with the new requirements on schedule. But it should also be said that the early full application of the new requirements in the short term in an economic environment such as the present one would prove excessively pro-psychical. And in this regard, as you know, the asset quality review that is going to be conducted by the ECB will take into account the facing periods. Moving quickly to the leverage ratio, this new tool whose entry into force is foreseen to be in 2018 seeks to reduce excess leverage in the banking system. I am aware that the introduction of this ratio as a pillar one measure is being discussed at the moment. And I understand that the doubts are not concerning its design, given its simplicity, but in the determination of its final calibration. It is of course very important to make good use of the time available before its entry into force to obtain replies to certain legitimate uncertainties concerning its functioning. We need to know how it affects specific business models. Okay, moving quickly to liquidity regulation. As you know, Basel III has included for the first time two ratios. A short term liquidity ratio called liquidity coverage ratio, the LCR, which seeks to ensure that banks have a buffer of five liquidity assets to meet foreseeable liquidity requirements for at least 30 days in a stress situation. With this is intended to give both banks managers and supervisors time to seek solutions to problems that may arise from a complex situation at the bank. Also ambitious in visits is the inclusion of a long term liquidity ratio whose design and calibration are still under discussion. The long term ratio is a structural indicator designed to prevent long term investments being financed essentially with short term liabilities. The last European quantitative impact study exercise shows that many European banks currently meet the required level of LCR, comfortably. 60% already meet the ratio and the average stands above 110%. At first glance, the estimates suggest that most of the banks would be able to comply with the NS of FR such that it is now designed. 50% already fulfilled, it's an 87% show a ratio higher than 85%. And these figures have improved along these semester quantitative impact studies. So again, the Europe banks are doing a reasonable work in this aspect. In any case, we should not forget that managing liquidity is much more than compliance with regulatory ratios and that the fundamental challenges for banks in this area will be among others to continue meeting the requirements after the external liquidity conditions given by the ECB to set up liquidity buffers that can be used in times of need, to raise the bar of liquidity and funding risk management and at the same time keep providing films and families with credit in a sustainable form. The incorporation of these liquidity ratios will entail a major effort for banks, not only because it is a new requirement but also because it depends changes in the management of this risk. Therefore, banks must be active in improving balance sheet structures. GC fees. It is clear that the bankruptcy might trigger serious problems in the global financial system owing to the size, complexity and interconnectedness. The problem they pose arises from the fact that in the absence of an appropriate legislative framework the threat of the bankruptcy often leaves no other option to authorities than to bail them out, which may involve major costs for taxpayers. So there are very important challenges in this aspect. The challenges for the so-called global systemic institutions and for the authorities involved in their supervision are basically three. To strengthen their own funds to address the capital surcharge for a higher capacity of loss absorption in a range between 1 and 2.5%, depending on the challenges that are included, the preparation and assessment of their orderly resolution plans and the application of a reinforced, more intensive and efficient supervision on these banks. Common European resolution framework. I would just like to highlight two topics because as I said it's going to be discussed in the next session. On the one hand the proposal for an early application of bailing tools and on the other one the distribution of labour and responsibilities between the supervisor and the solution authority in the forthcoming frameworks. On the first issue and probably in peripheral countries this is something that we are more worried about. I would caution against the application of bailing tools before the agreed timetable. If the bank recovery and resolution directive has established a transition period that extends until January 2019 was for a reason. While we all agree that uncovered senior creditors cannot be immune to the losses suffered by the bank in which they have invested in, I think that given the depth of the reform, financial markets and institutions will need the time to adapt to the new rules. The other issue I want to mention today is the definition of the mandates of the supervisor and the resolution authority as ensuring an adequate level of coordination between the SSM and the future SRM is key for the forthcoming system to work. More specifically I am referring to the importance of making sure that the legal framework requires that preparatory solution measures are decided only by the SSM and the SRM. Moving quickly to possible structural reforms in the business that banks are conducting. It is often argued that the regulatory reform should be complemented with structural reforms in the banking system. Why structural reforms? The measures being implemented may not be sufficient to correct the risk-taking incentives of banks that conduct risk trading activities which can obtain financing with favourable conditions on the basis of the implicit subsidy associated to deposit insurance. Structural reforms can be used to isolate essential financial activities. This is deposit taking from potential losses in other businesses, areas that are more risky and have lower economic value. There are several international initiatives as you know. We can mention the vocal rule in the US, the proposal of Vickers in the United Kingdom and more recently the draft banking reforms in France and in Germany. At the European level, a high-level group shared by Erkley-Kannen has prepared our report on this subject and the European Commission is suspected to issue a proposal in short. I would like to make only two reflections on this. At the current stage, the proliferation of isolated initiatives, as I mentioned, in key jurisdictions should be a source of concern, in my opinion. Given the global nature of the banking activity, a coordinated and consistent approach across jurisdictions seems necessary, especially within the European Union. Otherwise, there is a risk that the rules could be easily circumvented. Finally, structural reforms, as the ones mentioned, may affect the cost of funding and banking sector efficiency through reduced economies of scale and scope. A careful evaluation of this risk should be conducted before their implementation, in my opinion. And finally, regarding the comprehensive assessment, it has been mentioned already, I think, several times today. I would only want to say I participated actively in the asset quality review and distress test conducted in Spain. And I can assure you it's going to be a very difficult work both for supervisors and banks. So this means that over the next, I would say 11 months, a lot of work must be conducted by all of us. I'm sure that the goal and we will be successful to achieve it is strengthening the private sector confidence in the soundness of Euro, banks and in the quality of the balance sheets to sum up many challenges and efforts for both banks and authorities within a new regulatory framework and with a new role of the ECB through the SSM as responsible for the supervision of the European banks in full collaboration with the national supervisors. Thank you very much.