Lessons from the Financial Crisis to the Budgetary Stability and Control of the Public Sector

Abstract

The financial crisis that started in September 2008 has coincided with an increasing deficit and public debt process, largely caused by the need to dedicate significant financial support, in order to restore health to the financial sector and recapitalize it. 
Given the problems raised by the financial crisis, a set of reform initiatives have been developed: internationally, the Bank for International Settlements approved the reform package known as Basel III; in the European frame, significant reforms in banking solvency and in improving the internal bank governance have been applied. 
The swiftness of the reforms implemented in the financial sector allows to take advantage of the comparative experience of supervisors and regulators to review financial control mechanisms in the Public Sector, especially regarding efficiency control, where greater attention to the role played by the conflicts of interest and incentives for the supervisory bodies could improve governance and the degree of control, making it more operative. 
In this way an improvement in the degree of achievement of the constitutional principles of fiscal sustainability and efficiency of expenditure could be achieved, adopting a modern and renewed methodology for its implementation.