Analysed from a shorter time perspective, the expansion of credit proves somewhat more moderate, although it is not significantly removed from nominal GDP growth. As might be expected in the current situation, characterised by greater uncertainty and risk aversion, new loans are being granted under more onerous conditions than in the past, which include lower loan-tovalue ratios and shorter maturities. The trajectory followed by credit in Spain to August may be said to be behaving in a manner consistent with the process of adjustment the Spanish economy is undergoing and with the prevailing global conditions, which entail higher financial costs, heightened risk aversion and serious difficulties in obtaining funds on international financial markets. From the standpoint of financial stability, Spanish banks have demonstrated greater resilience than their counterparts in many other countries. But as I have previously stated, there is no room for complacency here, since the challenges ahead are considerable. A crisis such as that currently rocking worldwide financial markets can hardly be neutral for those who depend on such markets to a relatively greater extent. And nor can the fact that a sizeable portion of the Spanish financial system’s financing flows is tied in one way or another to the real estate sector be ignored either. However, for numerous reasons, including most notably the quality of our regulation and supervision, Spanish banks have not been involved either in the generation, marketing or acquisition of the toxic financial products that are inflicting such harm on the international financial system.

We have witnessed a process, with no practical solution in sight, involving nationalisations, bankruptcies, bank interventions, the creation of new investor guarantee schemes and considerable curbs on market practices, such as those affecting the short-selling of equities. The list of institutions affected includes most notably: the major investment banks, whose business model has succumbed to the turmoil; the US government-sponsored mortgage agencies; one of the biggest worldwide insurers; and major US credit institutions. In Europe, UK, Danish and Icelandic banks have been involved, as have more recently those from euro area countries such as Belgium, the Netherlands, Luxembourg, France and Germany. Moreover, several European governments have announced their readiness to guarantee their banks’ deposits. The foregoing developments pale into insignificance in the face of the importance of the US Treasury’s decision to propose a far-reaching programme whose stated aim is to tackle globally the serious problems besetting the American financial system. The initial appropriation of $ billion for this programme, and its dramatic presentation by the US Treasury Secretary, illustrate the scale of the problem. As you are aware, the plan was finally approved following heated debate in the House of Representatives and in the Senate. Clearly, beyond its effects on specific banks, this unprecedented crisis is profoundly shifting some of the key coordinates that have framed global financial developments in recent decades. An economy such as Spain’s, which has been financing a substantial proportion of its expenditure abroad, can hardly isolate itself from the consequences of such deep-seated changes.