in an economic environment such as the present one, would prove excessively procyclical. the regulation of systemic banks the second key aspect of the regulatory reform promoted by the fsb has been the creation of a new framework for the treatment of “ systemically important ” banks. systemically important banks are those whose bankruptcy might trigger serious problems in the global financial system owing to their size, complexity and interconnectedness. the problem they pose arises from the fact that, in the absence of an appropriate legislative framework, the threat of their bankruptcy often leaves no other option to the authorities than to bail them out, which may involve major costs for taxpayers. in response to this problem, the fsb designed a framework for the treatment of these banks. its starting point was the definition of a methodology to identify them and the publication in november 2011 of a list drawn up in accordance with this methodology. this was followed by regulatory capital requirements additional to those applicable to the rest of the sector. the latest fsb list, which includes two spanish banks ( santander and bbva ), establishes different tranches, depending on the capital surcharges they must meet, which range between 1 % and 2. 5 %. under the basel iii framework, these additional requirements will begin to be applied in 2016 and full implementation must be attained by 2019. the need for effective resolution frameworks another key ingredient of the new framework for the treatment of systemic banks is the obligation for them to draw up effective recovery and resolution plans, and the introduction of legislative arrangements that allow their effective application. in 2011 the fsb published a set of so - called key attributes with which the resolution regimes of each jurisdiction must comply. bis central bankers ’ speeches in spain, law 9 / 2012 of 14 november 2012 on the restructuring and resolution of credit institutions introduced a regime which brings forward several of the resolution - related elements required by the fsb. more recently, just some days back, the ecofin reached agreement on the draft directive on the resolution of credit institutions, which marks a crucial advance towards the implementation across europe of the fsb ’ s resolutions. this draft directive, which is still pending approval by the european parliament, seeks to give national authorities the powers and instruments for heading off banking crises and for the orderly resolution of any credit institution. the draft directive establishes an array of instruments with which to tackle banking crises in three phases or stages : in the preventive stage, in the case of early intervention and in the case of resolution

to create millions of jobs and to increase the welfare of spaniards during upswings, the reform approved this year should put an end to a situation in which dismissal and an increase in unemployment are the only way of adjusting the economy. this reform leaves workers and employers free to agree to increase competitiveness by increasing productivity and / or adjusting wages, with the only obstacles or impediments being those laid down by law. it is sometimes said that all this has been done too late. should labour - market reform have been carried out five years ago? it certainly should have. or ten years ago in 2002, when we were enjoying the long upswing? it would certainly have been better for spain. the same can be said about financial reform. why were savings banks not reformed during the good times? why were bank resolution schemes, such as the frob, not drawn up ready to resolve the banking problems created by the upswing? these questions merely lead to regret and, moreover, ignore the fact that, not only in spain, but almost worldwide, key reforms are introduced at the worst times. more encouraging is the principle of better late than never, and the important thing is that spain initiated the process of bank restructuring, now nearing completion, in 2009, that significant measures to reduce the budget deficit began to be adopted in may 2010 and that an ambitious labour - market reform was introduced in february this year. spain has proven itself capable of making adjustments and reforms and this is essential to restore long - lasting upswings and sustainable growth. but this reassurance must not lead to complacency. what we have done so far, despite its huge importance, is not sufficient. and some of us have the thankless task of pointing this out. for example, when each financial reform has been approved it has always been argued that the result will be more credit, but although bank restructuring is certainly an absolutely necessary condition, we have always seen that it is not sufficient by itself to make credit flow again. we have to restructure the financial system so that, as in any process of industrial adjustment, the resulting banks can generate a healthy profit and be sufficiently solid to meet demand when the adjustment process is complete. however, credit will not improve until solvent demand increases. hence the importance of other economic reforms to boost consumer and investor confidence, such as reducing the budget deficit and reforms, such as the labour - market one, to increase the economy ’ s growth potential. all these policies,