Market discipline through enhanced disclosure does of course form one of the pillars of the new Basel Accord but there are also broader international initiatives underway on this front. What I would like to do is spend a little time here discussing how increased public disclosure, and certain other aspects of the new Basel Accord, could affect financial efficiency and financial stability. Is it possible to achieve advances in both? Enhanced disclosure Clearly the architects of these initiatives believe so. Increased disclosure should help the market distinguish between well-managed and adequately capitalised banks and their poorly managed and unsound counterparts. The latter will as a result come under pressure to improve their performance. This should produce clear financial stability benefits, and also financial efficiency ones, since the weaker banks are likely to be those who in some sense misdirect, or rather mis-price, credit to borrowers. Greater disclosure should also help to address the propensity in financial markets for self-fulfilling crisis. By this I mean, the tendency as conditions deteriorate and confidence is dispelled for market participants to act in a way that precipitates crisis for firms that would otherwise be solvent. The greater the uncertainty the more participants will be liable to trigger a crisis in this way. Increased disclosure has a part to play in reducing this risk. But it also explains the importance that we attach to liquidity management and the need to ensure that, given the current focus on the new Basel Accord, the regulation of liquidity is not overlooked.

For this reason, it is of utmost importance to have an accurate diagnosis of the factors that limit the potential growth of the Spanish economy. In this respect, the diagnoses available tend to be unanimous in emphasising, first, the low productivity growth in comparison with other European countries and, second, the insufficient utilisation of labour. With regard to the lack of productivity growth, it is sometimes argued that the reason lies in our productive structure, insofar as industries in which the growth rate of this variable is more modest have a comparatively high weight. This argument has some merit. However, careful examination of the available evidence shows that relative productivity growth in Spain is lower in most industries. This is something that economic policies need to address  8  See Box 9 of the “Quarterly report on the Spanish economy”, Economic Bulletin 3/2020, Banco de España. 19  if we wish to raise the potential growth of the Spanish economy and, thus, the present and future well-being of our citizens. The cornerstone of any strategy to improve productivity growth, and thereby boost the opportunities of all citizens and the transition towards a more sustainable economy, should focus on two areas in which Spain has a worrying shortfall: human capital and technological capital. As regards human capital, Spain’s relative disadvantage with respect to more dynamic European economies should lead to a rethink of the institutional design of the educational system, including a far-reaching review of the curriculum content and the system of learning itself.