From a different standpoint, allow me to share one last thought with you, which is intended to highlight the importance of providing appropriate information to financial statement users. Institutions are required to help customers to understand the products that they are offered, to assess them properly and, for this purpose, to identify the risks associated with each product and tailor them in terms of customer tolerance and affordability. In this respect, the Banco de España has always recognised that the smooth working of the financial system requires well-informed consumers capable of making responsible decisions. For this reason, in February this year an Internet portal was set up for bank customers. It is receiving 2,000 visits daily. Its purpose is not to give advice or make recommendations, but to orientate consumers in their dealings with credit institutions and help to make information available to them. Well-informed consumers, together with an attitude of transparency on the part of institutions, help to increase market discipline, with the consequent favourable effect on competition and efficiency in the Spanish banking system. I would not want to finish without conveying a message of confidence in our financial system. I am sure that Spanish institutions will, as in the past, show that they are capable of facing all the challenges to which I have referred. I therefore trust that the managers of institutions will act professionally and prudently, designing business strategies that are sustainable in the medium and long term.

In applying this caveat to Spanish institutions, we shall focus on the three lines of defence used by institutions to protect themselves from possible difficulties: risk management, which enables ex ante minimisation of difficulties, and profitability and solvency, which make it easier to absorb risks once they materialise. As regards risks, the low levels of default unquestionably reflect not only the favourable financial and macroeconomic trends, but also improvements in the procedures for identifying, measuring and controlling those risks. The sharp increase in activity, however, poses certain questions to which some thought should be given. First, although the fastest growing instruments are secured loans, their concentration in the real-estate market, together with growing household indebtedness, should be taken into account by managers, since both factors (sectoral concentration and growing indebtedness) entail under alternative scenarios a greater risk, which should be analysed within the framework of an institution’s medium- and long-term financial strategy, taking account of its financial equilibrium conditions. Second, there is a need for the management systems used to incorporate the regular performance of stress tests under adverse scenarios, considering variations in real estate prices, changes in interest rates and other possible modifications in macroeconomic data. This analysis will be of use in regularly reviewing each institution’s strategy and will determine the advisability of establishing internal control measures and how to ameliorate the residual risk incurred. Particular attention is required by those market segments, such as the financing of real-estate development activities, which have shown higher risk in the past.