Also, it should be sought to enhance work-life balance, to promote the birth rate and to tailor migratory flows to the demand for specific professionals and job profiles. Finally, as I said regarding the minimum wage, the measures aimed at protecting the lowest incomes should be designed in such a way as not to diminish employability. Meanwhile, the factor productivity growth rate of the Spanish economy continues to be low (see Chart 15). The modest growth of productivity has been associated with a lower rate of growth of firms’ average productivity in Spain than in other European countries, and with an allocation of resources to less productive firms during the past expansion. Addressing these problems requires an improved business competition framework. Regarding this last matter, over the last decade much of the loss in competitiveness – measured in terms of relative unit labour cost indicators – accumulated during the expansionary phase relative to the euro area as a whole (see Chart 16) has been recovered. This improvement is mainly explained by the improved labour productivity associated with severe job destruction during the crisis and by wage moderation, while the correction associated with profit margins has been less important. This fact, which at first may have been associated with the need for firms to improve their financial position, may now be evidencing a certain lack of business competition in some sectors, the persistence of which may hinder the proper allocation of resources, incentives and innovative capacity and, in general, the well-being of consumers.

While some degree of forbearance may be unavoidable and even appropriate under the right conditions, it is at best a temporary measure. It is critical that forbearance not become institutionalized,  2  BIS Review 10/2001  but be tied directly to actions by both bankers and supervisors to address underlying problems. •  Governments are not good long-term asset managers. Prolonged government holding of impaired assets is not likely to enhance their value, nor aid in the restoration of market liquidity. •  Governments are not good commercial bankers. Delayed privatization of nationalized banks always means higher future costs, and usually inhibits fundamental reform. •  Government-directed lending means future fiscal losses. Similarly, efforts to stimulate credit growth by nonmarket forces in the context of a banking crisis at best buy additional time, and usually dig a deeper hole. •  Foreign investment in domestic financial sectors can yield important benefits. Foreign direct investment in the banking sector can provide much-needed capital resources, technology and knowledge transfer, and a more diversified capital and funding base in the event of future economic instability. •  Financial sectors are only as healthy as their borrowers. Without corresponding corporate sector restructuring, financial sector rescue efforts are likely to be necessary in the future. •  Strong financial systems depend on a reliable and credible legal system. In the absence of a strong legal system, borrowers lack appropriate incentives to repay. •  There are no "quick fixes" to financial sector problems.