The crisis has but highlighted the importance of a healthy banking sector, with sufficient buffers to absorb unexpected losses. We must ensure that the sector’s resilience remains in place for new risks that may emerge. A reminder, too, that the Basel III global reforms have still to be implemented. The aim is to homogenise the calculation of risk-weighted assets across institutions and, to achieve this, a key element is the so-called output floor. Essentially, a floor is set on the reductions banks can obtain using internal models to calculate minimum capital requirements instead of the standardised approach. This objective remains wholly in place. Indeed, after having delayed implementation by one year, all the members of the Basel Committee on Banking Supervision it is my privilege to preside have committed to fully implement this reform on the new date. At the national level, the coordinated supervision of risks to financial stability has been strengthened with the creation of the Spanish macroprudential authority (AMCESFI). In parallel, new macroprudential instruments have been made available to the Banco de España, increasing our capacity to act ahead of episodes of excessive or inappropriate credit growth. Aside from these improvements, it would be worth reflecting on our institutional financial architecture. In the wake of the previous international financial crisis, some countries changed their models, generally moving to more integrated models involving a greater role for central banks.

Generally, it is appropriate to increase the contributivity of the system and its transparency, ensuring a level of sufficiency for those households with more limited resources. Also, establishing automatic adjustment mechanisms would help stabilise the system, adapting it to demographic and economic changes. Indeed, several EU countries (such as Germany, Sweden and Italy) have already established a link between the level of benefits or retirement age and life expectancy. Combating climate change and smoothing the transition to a more sustainable economy are another of the fundamental challenges we face. Fiscal policy should take the lead in attaining objectives in this field, both to deter the most environmentally harmful activities, through an internationally harmonised tax system, and to foment the public and private investment needed to develop cleaner technologies and alleviate the social costs of the transition. As to inequality, we began the current crisis with a higher level than was the case at the end of the previous upturn, and everything suggests that this crisis will entail a further increase. The employment protection and income support measures approved should contribute to lessening the vulnerability of the households most affected. Also, many of the reforms intended to improve productivity or lower unemployment and job insecurity are vital for  7  reducing inequalities. The minimum life income scheme could, in coordination with regional government arrangements, contribute to alleviating extreme poverty. In this connection it will be important, as provided for in the scheme’s founding legislation, to assess its application on an ongoing basis.