The Banco de España has established that two to three evaluations will be carried out, as set out in the Annual Evaluation Plan approved by the Governing Council, at the proposal of the Governor. Any activity carried out by the Banco de España in the exercise of its functions may be subject to evaluation.
In this context, the Independent Evaluation Office has proposed several areas for evaluation. Each evaluation will be conducted by the office itself, with the contribution of a team of external evaluators selected from individuals with recognized expertise and professional experience in the relevant field.
The current Evaluation Plan includes the following evaluations for the period:
- Evaluation of the Conduct Supervision of the Banco de España
- Evaluation of the Decision-Making Framework for Macroprudential Policy
- Evaluation of the International Cooperation of the Banco de España
This Evaluation Plan covers the period 2023–2024, with activities starting in 2023 and, as far as possible, concluding by December 31, 2024.
1. Evaluation of the Conduct Supervision of the Banco de España
- Directorates General or Departments involved: Directorate General of Financial Conduct and Banknotes, Department of Entity Conduct.
- Timeline: The evaluation will begin in the last quarter of 2023 and will last approximately nine months.
- Objective and scope:
Since 2014, the Banco de España has developed a differentiated conduct supervision approach, starting with the creation of the Conduct Supervision Division within the Department of Entity Conduct. Since then, it has worked on national and European regulation and has supervised areas such as financial advertising, customer service, and transparency in credit and payment services.
In response to increased risks stemming from post-2008 litigation and the digitalization of financial services, the Banco de España included the strengthening of this function in its 2020–2024 strategic plan. In 2022, it created the Directorate General of Financial Conduct and Banknotes, aiming to shift from corrective to preventive supervision by anticipating risks and aligning expectations with the sector.
An external evaluation, incorporating experiences from other international supervisors, is considered key to supporting this transformation.
- Evaluation descrption:
The external evaluation will critically assess the conduct supervision model of the Banco de España, reviewing its organization, methodology, resources, and available expertise. The goal is to measure the effectiveness of the current model and propose improvements, with special attention to governance, communication, conduct profiling, and information-gathering mechanisms.
2. Evaluation of the Decision-Making Framework for Macroprudential Policy
- Directorates General or Departments involved: Directorate General of Financial Stability, Regulation and Resolution; Department of Financial Stability and Macroprudential Policy.
- Timeline: The evaluation will begin at the end of the first quarter of 2024 and will last approximately nine months.
- Objective and scope:
Macroprudential policy aims to reduce systemic risk in the financial system through tools applied to credit institutions. The Banco de España, as the competent authority in this area, has nearly a decade of experience in its implementation. Given the time elapsed, it is considered appropriate to assess whether the current framework is adequate or requires adjustments.
- Evaluation description
The evaluation will assess whether the early detection framework for systemic risk accumulation is adequate. It will also analyze the robustness of the methodology for selecting the most appropriate macroprudential tools. Moreover, it will review whether administrative processes allow for agile decision-making. Finally, it will evaluate the effectiveness of the communication policy regarding adopted decisions and assess the monitoring framework for implemented measures.
3. Evaluation of the International Cooperation of the Banco de España
- Directorates General or Departments involved: Directorate General of Economics and Statistics, Department of International and European Relations.
- Timeline: The evaluation will begin in early 2024 and will last approximately nine months.
- Objective and scope:
The international cooperation activity of the Banco de España has grown significantly, with over 250 activities carried out in 2022, including 26 multilateral events and the participation of more than 800 Banco de España experts and 6,000 beneficiaries. The International Cooperation Unit coordinates these actions and has promoted the signing of 17 cooperation agreements with central banks and other institutions.
The evaluation will focus on:
- The impact of international cooperation on partner institutions (i.e., recipient institutions).
- The efficiency of activity execution, including coordination processes and governance structures.
- Evaluation description:
The evaluation will analyze the policy developed over the past five years to strengthen cooperation in Latin America. It will also assess the present and future of international central banking cooperation in light of recent strategic objectives. Finally, it will evaluate the adequacy of the structure, governance, and use of available resources.
