The adjustment of the productive capacity of the Spanish banking system has already lasted ten years, the number of branches having been reduced by more than 40% from its peak in 2008, while staff numbers have fallen by more than 30%. In this scenario, in which extraordinary growth in total lending is not expected in the short or medium term, efforts to restore profitability should be based on adjusting expenses to the new size of balance sheets, seeking alternative sources of income and improving efficiency. That said, we must remember that the search for profitable business cannot be at the expense of the necessary vigilance of credit conditions. This basic premise is a necessary condition for the appropriate management of credit risk. I wish to point this out because we are seeing high rates of growth in bank lending to households for the acquisition of consumer durables (15% year-on-year in September 2008, after rates of more than 20% in previous quarters) and, what is more symptomatic, the default rate associated with this activity has already begun to accelerate significantly. This situation suggests that there has been some easing of the risk acceptance and selection standards in this segment. It is vital that the lessons of the crisis not be forgotten here: past experience has shown that loosening credit standards eventually leads to notable increases in default rates. Although the weight of this business segment in the lending of Spanish banks as a whole is low, the growth observed should be a warning sign.

These issues take on special importance in the context of the potential increase in long-term saving associated with population ageing. In any event, in recent years companies have increasingly turned to European capital markets for finance. This trend towards financial disintermediation is explained by factors such as the ECB's corporate debt purchase programme, along with more permanent factors such as the introduction of new international banking regulation in response to the financial crisis. The primary aim of the regulatory reform is to foster financial stability by strengthening banks’ resilience to future shocks, but it has the side-effect of creating incentives to move typical bank services outside the reach of the sector’s safety nets. Indeed, various analytical studies –including the annual FSB non-banking financial intermediation monitoring reports– suggest that fund managers’ business has grown substantially over the past decade. Moreover, this growth has been observed particularly in the case of open-ended funds that offer their unit-holders daily reimbursements and which invest in assets that are somewhat illiquid or have long maturities. In other words, they perform activities that share the need to manage some of the risks characteristic of typical banking business, such as maturity transformation, leverage or liquidity risk. I therefore feel international financial regulation needs to follow the principle that activities with similar risks should be subject to similar supervision and regulation. And in the supervision and regulation of all entities and activities, the risks they pose to the financial system, particularly those of systemic importance, must be taken into account.