4  BIS central bankers’ speeches  Iyer, R. and J.L. Peydró (2011), Interbank Contagion at Work: Evidence from a Natural Experiment, Review of Financial Studies. Jiménez, G., Mian, A., Peydró, J.L. and J. Saurina (2010), Local versus Aggregate Lending Channels: The Effects of Securitization on Corporate Credit Supply in Spain, NBER WP 16595. Jiménez, G., Ongena, S., Peydró, J.L. and J. Saurina (forthcoming), Credit Availability: Identifying Balance-Sheet Channels with Loan Applications & Granted Loans, American Economic Review. Jiménez, G., Ongena, S., Peydró and J. Saurina (2011), Macroprudential Policy, Countercyclical Bank Capital Buffers and Credit Supply: Evidence from the Spanish Dynamic Provisioning Experiments, Bank of Spain mimeo. Jiménez, G., Ongena, S., Peydró-Alcalde, J.L. and J. Saurina (2011), Hazardous Times for Monetary Policy: What do 23 Million Loans Say About the Impact of Monetary Policy on Credit Risk-Taking?, CEPR DP 6514. Jiménez, G. and J. Saurina (2006), Credit cycles, credit risk and prudential regulation, International Journal of Central Banking. Kalemli-Ozcan, S., Pappaioannou, E. and J.L. Peydró (2010), What Lies Beneath the Euro, Journal of International Economics. Maddaloni, A. and J.L. Peydró (2011), Bank Risk-taking, Securitization, Supervision, and Low Interest Rates: Evidence from the Euro-area and the U.S. Lending Standards, Review of Financial Studies. Martínez-Miera, D. and R. Repullo (2010), Does Competition Reduce the Risk of Bank Failure? Review of Financial Studies (2010). Matutes, C. and X. Vives (2000), Imperfect competition, risk taking, and regulation in banking, European Economic Review.

In other words, the implementation of reforms and changes in the banking sector after a banking crisis – in respect of business practices, regulation and supervision – has the potential to strengthen the foundations of the banking sector, thereby improving its ability to contribute to sustainable economic growth. Given the limited time that I have, I will focus on some key structural developments in the banking sector that have taken place over the past twenty years and that are described and analysed in several chapters of the book. In addition, I will examine how the regulations introduced by the Bank of Spain during the boom years helped to prevent and mitigate the negative effects of the crisis and, especially, how some of the reforms and structural changes that are currently being considered may substantially reduce the fragilities of the banking sector. If implemented, they will strengthen the banking system and ultimately have positive effects on financial stability and economic growth in Spain. Some reflections on banking developments during the last two decades As I see it, Spain’s banking sector has undergone two fundamental changes since 1990: banking liberalisation and financial innovation. Banking liberalisation has produced a notable increase in competition among institutions and in financial integration. For example, the cajas (savings banks) have started to compete geographically and in different business segments. The increased competition has also led, at different times during these 20 years, to strong competition for bank deposits (e.g. la “guerra del pasivo” at the end of the 80s).