Banking Supervision

Credit institution solvency

The prudential regulation of credit institutions is to ensure that these institutions operate with sufficient capital so as to be able to assume the risks of their financial activities, contributing to the stability of the financial system. These solvency requirements are applicable to consolidated groups of Spanish credit institutions and to individual credit institutions of Spanish nationality that are not part of a consolidated group.

Current regulations can be found under Reglamento (UE) n.º 575/2013Opens in a new window and Directiva 2013/36/UEOpens in a new window, which incorporate the credit institution solvency requirements established in Basel III into the Community system. In turn, Community legislation has been transposed into the Spanish legal system through Ley 10/2014Opens in a new window, Banco de España Circular 2/2014Opens in a new windowReal Decreto 84/2015Opens in a new window, and, finally, Banco de España Circular 2/2016Opens in a new window.

On a Community level, this regulation is complemented by the so-called binding technical standards, which the member States are obliged to respect and implement. Contained within these standards are the technical regulation standards, whose objective is to modify or complement the non-regulatory elements of a legislative text (Directive or Regulation), and the technical enforcement standards which aim at ensuring consistent implementation of a legislative text.

The financial conglomerates, due to their institutional and operational features, are subject to additional solvency, information and supervision requirements. The basic regulation can be found in Directiva 2011/89/UEOpens in a new window, which has been essentially transposed through modifications which, both the Ley 10/2014 and the Real Decreto 84/2015, introduced respectively in the Ley 5/2005Opens in a new window, of 22 April, concerning the supervision of financial conglomerates and which modify other financial sector laws and in the Real Decreto 1332/2005Opens in a new window, concerning the implementation of such supervision.