The crisis in financial markets underlines more than ever the importance of having a solvent, profitable, healthy and sustainable banking system. Though we are still living through it, it is not too early to draw some lessons.

I believe the causes cannot be found in any one market, such as the US. Nor are they limited to a particular business, such as subprime mortgages. These triggered the crisis, but they did not cause it.

The causes are the same as in any previous financial crisis: excesses and losing the plot in an extraordinarily favourable environment. Indeed, some fundamental realities of banking were forgotten: cycles exist; lending cannot grow indefinitely; liquidity is not always abundant and cheap; financial innovation involves risk that cannot be ignored.

I believe banks can contribute to a stronger system by returning to fundamentals. They must focus on customers, focus on recurrent business based on long-term customer relationships and be cautious in managing risk. This last point is especially important. You do not need to innovate to do this well. You do not need to invent anything. You need to dedicate time and attention at the highest level.

Many are surprised to learn that the Banco Santander board's risk committee meets for half a day twice a week and that the board's 10-person executive committee meets every Monday for at least four hours, devoting a large portion of that time to reviewing risks and approving transactions. Not many banks do this. It consumes a lot of our directors' time. But we find it essential and it is never too much.

We agree with the recommendations various international bodies have made: good risk management must be independent from business areas and involve the highest level of management.

This means the board must know and understand banking, which leads to a further point: stronger corporate governance. For years, the idea of a mostly independent board was promoted as a hallmark of good governance: the best director was the one most removed from the business because he was the most independent. That was the wrong approach. This is a complex industry, subject to constant change and innovation. What is needed are directors who know the business well. That is why at San­tander we have nine bank chairmen or former chairmen on our board, in addition to our independent directors.

We have also learnt some lessons about banking supervision and regulators. Technical solutions were not enough to restore market confidence. Clear messages from political leaders have been crucial. In a global world, leadership must always be shared and messages aligned to avoid generating confusion or problems across various markets. This is especially true in Europe, where Santander favours more co-ordination.

What should the priorities be? We must focus on liquidity. A financial institution's lifeline is - or has up until now been - capital. Supervisors focused on capital to assess an institution's solvency. After this crisis, we must also pay attention to liquidity, because we have seen it can put a bank at risk.

We must avoid generating moral hazard: we cannot transmit the message that it is possible to act without assuming responsibility for your errors.

We must also encourage transparency. The magnitude of this crisis is directly linked to the uncertainty about who was affected and to what degree. To restore confidence, the market must provide maximum transparency about the risk profile of all the actors in the financial system.

In general, we have to reinforce supervision. The measures agreed last weekend by the eurogroup (the eurozone finance ministers) point in the right direction. They are a co-ordinated response, providing a road map of measures for eurozone governments.

The Spanish government has approved a package of measures aligned with this agreement. However, in my opinion, Spanish banks, due to their solvency and strength, do not need the government to take ownership stakes, as has occurred in other countries. The Bank of Spain has done its job exceedingly well.

It is essential that these measures do not affect the market's functioning and that good management is rewarded. As these measures are applied, a level playing field must be maintained among financial institutions.

The writer is chairman of Banco Santander. The article is based on his speech on Wednesday at the First Santander Conference on International Banking