Another was the greater weight of the sectors most affected by these measures. But the impact is also the outcome of the smaller size, on average, of our firms. SMEs are less adaptable to this shock, given that they usually face greater obstacles in gaining access to external financing; their fixed costs are, in proportion to their turnover, higher; and their levels of digitalisation are generally lower, which hampers their access to remote working. The first two editions of the Banco de España’s Survey on Business Activity confirm these circumstances. The impact of the crisis has been very uneven, as the sectoral outlook evidences. Thus, while effective social security registrations1 were, in February, 6.8% down on their prepandemic level, the figures were significantly worse in the sectors whose activity has most been restricted, such as hospitality, retail trade, artistic and recreational activities, and some other services. For example, in the hospitality industry, the level of effective registrations was almost 50% down, whereas in health care and in general government it was 4% higher. Moreover, the sectors most affected by the crisis employ, on average, workers with lower educational levels. In fact, the decline in employment among the lower qualified amounted to 15.1% in 2020 Q4, compared with the slight increase among those with higher studies (0.4%). Also of note was the fall in employment among young adults (aged 16-29), at 10.4%, compared with the 1.4% increase among the over-45s.

Among these, we have witnessed the separation of the responsibilities for preserving the financial soundness of all financial institutions irrespective of their nature (banking, insurance, securities, etc.) and for overseeing the conduct of their relations with  9  customers, assigning such responsibilities to different authorities (to the Banco de España and to the CNMV, respectively). This is, in my view, an optimal institutional arrangement for managing potential clashes between both responsibilities and for enhancing the efficiency and effectiveness of the supervisory activity. As I said, it will be important to respond to the new risks that emerge, which include most notably climate change and digitalisation. In the case of climate change, we supervisors must ensure that banks correctly assess risks and incorporate them into their portfolio management. We must also fulfil a complementary role by developing databases and appropriate reporting requirements, and by including risks in financial stability analyses. Indeed, many supervisors are developing environmental stress tests. As to technological developments, there are prominent risks associated with cyber attacks or with dependence on external services providers. But there are also those arising from the growing competition with technological companies, which may become disruptive. The consequences for prudential authorities are significant. We must maintain proactive supervision, since the traditional regulatory framework may not be enough. And we will have to question the regulatory perimeter, so that the habitual mantra of “same activity, same risks, same rules” is genuinely operational. Finally, we must strengthen cooperation among authorities given the diversity of sectors affected.