However, the official forecast is that, overall, these territorial governments will still post a deficit in 2007 despite the benign economic circumstances over the last few years. Second, budgetary stability should be accompanied by an improvement in the quality of public finances to secure advances in the allocation of factors of production, particularly human and technological factors, and in the efficiency of the economy. The spending policies included in the draft Budget give priority to areas of key importance for improving productivity, such as increased resources for research and development, education and infrastructure, although other priority items entail increases in current primary spending. It is important that the envisaged increase in resource allocation be managed efficiently through the use of better suited mechanisms to assess and select public policies so as to enable real increases in productivity. The budget is not, however, the only instrument, nor often the most appropriate one, to achieve the aim of raising the efficiency of the economy. Structural policies designed to make  BIS Review 130/2007  5  factor and product markets more flexible will be called on to make an essential contribution to this aim and, for this purpose, it is necessary to persevere with and extend the processes of liberalisation undertaken in recent years. Policies of this type, which enable growth potential to be raised and make for the efficient allocation of resources in the economy, are pivotal in the present conjuncture, which, as stated earlier, requires a rebalancing of the sources of growth of the Spanish economy.

3 I set out our ambitions for the Fintech Hub in my speech “Open to Fintech”, available at https://www.bankofengland.co.uk/speech/2018/dave-ramsden-speech-hmts-international-fintech-conference. 4 See https://www.gov.uk/government/publications/cryptoassets-taskforce 5 See https://www.bankofengland.co.uk/news/2018/november/boe-boc-mas-joint-report-digital-transformation-in-cross-border-payments 1  2  All speeches are available online at www.bankofengland.co.uk/speeches  2  financial services might evolve over the next decade as part of the Bank’s Future of Finance project6; and analysing everything from the potential role of BigTechs in financial services to the implications of Open Banking and PSD2. But instead of looking back, I want to stay faithful to the spirit of today’s session and look forward to the contributions the Bank can make to the future of finance. Fintech is one of the Bank’s seven strategic priorities for 2019. In particular I’ll discuss three key areas of Fintech Hub focus in 2019: payments; unbundling; and artificial intelligence.7  Payments The first area I’ll focus on is payments. While the Bank is not nearly as old as the Guildhall, this year we are celebrating 325 years as the UK’s central bank; that includes 325 years of providing foundational payments services. Payments have become increasingly digital in recent years, and there are now hundreds of alternative payment methods8 available; recent years have seen a significant diversification of payment companies with new entrants to the market, such as e-money institutions and technology companies – which is why the subject is of interest to the Fintech Hub.