been observed in spain and in other developed countries. this phenomenon especially affects large corporations. among the factors potentially contributing to this development are the regulatory changes in the financial arena, imposing stricter requirements on banking activity, as mentioned earlier, and the corporate sector purchase programmes by central banks, which has reduced the cost of issuing these assets. looking ahead, this trend towards the expansion of capital markets might continue if progress can made on the european project to create a capital markets union. also, a potential increase in long - term savings linked to the ageing of our society could also contribute in the same direction. although a greater diversification of financing sources could potentially be positive for nonfinancial corporations, making them less vulnerable to adverse shocks affecting a specific financing channel, for credit institutions it could entail a reduction in business volume and income. this is particularly relevant in the current setting of low demand for financing in spain, in which this trend could contribute to further eroding the net interest margins in some market segments. to conclude, let me sum up the key messages i would like to convey. in recent years, spanish credit institutions have made sterling efforts to overcome the problems stemming from the crisis and to adapt to the new and stricter regulatory requirements. this has been reflected in the significant improvements in their solvency, profitability and asset quality. however, despite these improvements, spanish banks continue to face major challenges, largely shared with other euro area banking systems. these include, most notably : ( i ) stepping up sales of non - productive assets ( ii ) the need to strengthen capital, ( iii ) addressing profitability challenges without unduly easing credit standards and, lastly ( iv ) harnessing new technologies in a competitive environment of potential new competitors. in an economy as highly banked as spain ’ s, overcoming these challenges is key to the banking industry gaining a sufficient position of strength from which to contribute to economic growth and job creation. thank you for your attention. 8 / 8

meeting their obligations. in sum, deposit institutions help reduce both adverse selection and moral hazard problems, while their ability to transform maturities allows them to provide liquidity. the enabling mechanism for the proper functioning of this system is depositors ’ confidence in deposit institutions. efficiency in savings banks among overall deposit institutions, savings banks undoubtedly play a significant role, contributing as they do to the distribution of market share among a bigger number of institutions, thereby fostering competition. likewise, in a sector whose cornerstone is depositors ’ confidence, properly run savings banks contribute to reinforcing the stability of the financial system. savings banks are an old and peculiar form of financial institutions, and display a set of particularities relating both to the significant social content of their action and to their strong regional roots. i shall address these two aspects. first, savings banks have, since the outset, been characterised by their contribution to preventing financial exclusion. that is to say, central to their objectives is a concern to ensure that the more disadvantaged segments of the population may have access to financial services. in this respect, savings banks have always paid particular attention to the financial needs of households and companies integrated into the social fabric. thus, by granting access to financial services to a large segment of society, they have made a considerable contribution to the increased efficiency of the financial sector and the economy. secondly, we should not forget that savings banks allocate a high percentage of the profits they generate each year to financing social projects. last but not least, the close relationship savings banks have with the region in which they are established is another of their differentiating and defining features. throughout their history, they have been clearly committed to strengthening the social and economic fabric of their heartland, thus becoming key players in regional development. this, in turn, provides them with greater retail customer loyalty, which no doubt offers a higher degree of stability for their business model. yet while all the foregoing is acknowledged and given the broad consensus that savings banks should retain their social commitments, i believe it should not be forgotten that, above all other considerations, they are deposit institutions. as such, and so as to promote the sound working of the financial system risk management, profitability and solvency should be at the heart of their concerns. indeed, it is precisely through controlling risks, maintaining acceptable profitability and a level of solvency appropriate to their risk profile that savings banks will be able to survive and prosper over time. it is only through operating properly as business