Internationally, it is currently accepted that governments have very important tasks to perform in the financial field. These may include designing restructuring strategies, determining resolution instruments, deciding on the use of public funds, etc. But there is also broad consensus that such tasks should be implemented by independent regulators and supervisors. By assigning the regulatory and supervisory remit to independent institutions that act using sound technical criteria, the danger of decisions being subject to the vagaries of politics or to lobby group interests is removed to some extent. Reasons of technical capability also come into play. Independent and professional supervisors have the time and resources to build up enormously rich knowledge which, given the particular characteristics of financial activity, is essential for tackling problems in this sector, minimising errors and unwanted side-effects at the same time. Having independent regulatory and supervisory institutions by no means guarantees that mistakes are not made. But their presence ensures that decisions are not tainted by momentary political considerations. I cannot say that the Banco de España, in its supervisory mission, has not occasionally been mistaken. But I can assure you that the decisions of the Banco de España have always been based on exclusively professional criteria. This is an important facet of independence. Independence is not something innate. It is not a label or badge conferred by anyone. Independence is demonstrated, and it is exercised or not exercised. Nobody is independent for what they are, but rather for what they do.

As regards the sector’s capacity and the size of banks, staff and office numbers fell by around 12%, standing at similar figures to those as at end-2004, and the average size of banks in terms of their assets increased twofold. Yet this progress was not enough to restore investors’ confidence in the soundness of our banking system. Given the double-dip recession, the insufficient reduction in the budget deficit and the continuing effects of the sovereign debt crisis, doubts persisted about the quality of construction and real estate development-related assets. In an attempt to dispel this uncertainty, various measures were adopted in the first half of 2012. Furthering the principles that have governed the ongoing restructuring of the financial system, the measures addressed accelerating the clean-up of bank balance sheets, reinforcing their solvency, boosting integration processes and promoting transparency. RDL 2/2012, approved in February, stipulated an increase in provisioning for construction and real estate development-related assets, and the creation of a capital buffer to cover potential losses arising on problem loans associated with land and ongoing developments. More recently, in May 2012, the Government approved RDL 18/2012, on the clean-up and sale of financial-sector real estate assets. The aim was to dispel doubts over the quality of Spanish credit institutions’ non-doubtful real estate portfolio. To do this, provisions for construction and real estate development-related assets not classified as troubled have been raised substantially, bringing forward the impact of potential additional impairment to this portfolio.