So as to be able to have a new toolkit adapted to this crisis, more than half a dozen laws1 had to be approved, from first creating the Fund for the Orderly Restructuring of the Banking Sector (FROB) in 2009 to the last Decree Law approved in February, with regulations that have set about righting the shortcomings. These include the creation of an institution/fund allowing for the obligatory and orderly restructuring of non-viable banks and encouraging the merger of viable ones; the regulation of institutional protection schemes; the possibility of converting savings banks into banks; new capital requirements to speed through restructuring; the granting of greater powers to the Banco de España; the merger of the deposit guarantee funds, etc. Promoting all these changes in a full-blown crisis was like carrying out two tasks on a ship that has hit the rocks: while evacuating the passengers, it was necessary to repair the lifeboats. A most difficult task, as I said, but the seven laws have now been passed. And there is one very positive aspect, namely that all these regulations had the backing of the country’s two main parties. This is perhaps why these reforms have maintained a series of common characteristics and, while giving due merit to the main actors, i.e. the different governments and the legislative chambers, mention might be made of the advice that the Banco de España has offered and continues to offer.

Starting in the fall of 2007, the New York Fed has conducted a long-term research project to improve our understanding of existing measures of consumer expectations, and to explore the feasibility of expanding and potentially improving these measures. We developed and then tested new questions on expectations, designed measures of individual forecast uncertainty, and collected information on expectations and decisions for a broader range of household behavior than is currently gathered by existing surveys. In general, we wanted to understand better the process of forming expectations and updating those expectations, as well as the links between expectations and consumer behavior. In pursuing this project, we collaborated with the RAND Corporation, other Federal Reserve Banks, academic economists, and psychologists with expertise in survey design. We conducted in-depth cognitive interviews and fielded psychometric survey modules utilizing RAND’s American Life Panel, and various convenience samples created by researchers at Carnegie Mellon. Finally, we conducted many experimental surveys as part of the American Life Panel internet survey. Incorporating the lessons we learned from these initiatives led to the final design and implementation of our Survey of Consumer Expectations. Our goal throughout has been to collect timely and high-quality information on consumer expectations and decisions. We were particularly interested in filling in what we viewed as gaps in existing sources of information on household behavior, including data on household finance, labor, and housing market expectations. In addition, we decided that a rotating panel structure, one that tracks the same individuals over time, was necessary for many research and policy applications.