It is only through operating properly as business concerns, basing their management on professional criteria relating to economic and financial rationale, that savings banks can continue creating value for society and for their regions. Let me turn now for a moment to the Spanish experience. Our “cajas de ahorros” are also very old financial institutions and our story has been a successful one. When I explain the characteristics of the Spanish financial system, and in particular the prominent role of savings banks, some of my foreign counterparts ask about potential problems of fragility and inefficiency and my answer is always the same. Not only are they neither fragile nor inefficient, but they are also as profitable as their banking counterparts, and they are increasing their market share year after year. They are a major contributor to making the Spanish banking sector an efficient and competitive one. I earlier drew a distinction between macro and micro efficiency. Savings banks in Spain have made significant contributions to the macroeconomic efficiency of our system. In bolstering efficiency at firm level, certain factors, which I shall now refer to, should be given particular consideration by savings banks. Any management action geared to cost-rationalisation should pass a careful and thorough cost/benefit analysis so that certain elements of their long-term strategy or their risk profile should not deteriorate. Let me mention a few of these elements. Investment in new technologies Efforts to improve efficiency must be compatible with the challenges posed by new technologies.

But the role of an efficient financial system is not confined solely to the important task of channeling savings, liquidity and risks. An efficient financial system should also contribute to improving financial stability and reducing procyclicality, i.e. the amplification of business cycles resulting from the interplay of the real economy and the financial system. An efficient financial system allows the impact of various shocks to be absorbed, distributing them over a lengthier period of time. Conversely, an inefficient financial system overreacts at a later juncture, ultimately impacting the real economy considerably. While we know from recent experience that the interaction between the real and the financial economy is increasingly important and intense, we also know that it is likewise very complex. This is not only because of the progressive increase in the relative size of financial markets, but also because of the growing weight of financial channels in the international transmission of shocks and economic conditions: uncertainty and instability on financial markets and the fall in stock market prices affect households’ financial wealth; the cost for companies of resorting to the stock markets to obtain financing to undertake new projects rises substantially; financial institutions readjust their strategies in step with the new risk context, etc. Progress in market participants’ practices and standards supported by financial regulation and supervision that provide incentives for forward-looking strategies are necessary elements of such macro efficiency. In this way, it is possible to gain robustness and room for manoeuvre in good times, and at the same time encourage good risk management.