the banco de espana also ranks first for this ratio ( i. e. the lowest proportion ) among the euro area central banks. if we compare operating expenses, i. e. including personnel costs, administrative expenses, depreciation of tangible fixed assets and banknote production, in relation to the balance sheet total, the proportion for the banco de espana in 2013 was 0. 12 %, which is also the lowest among the group of the six national central banks with the biggest balance sheets in the eurosystem. in short, on the basis of these data the banco de espana can be said to score highly, comparatively speaking, from the standpoint of the efficient use of its resources. the directorate general for banking supervision is the business area in the bank most affected in terms of functions and human resources owing to the start - up of the ssm, though it is not alone in this. it had a staff of 416 at the start of 2013, 16 % of our total employees, 373 of whom were managerial staff ( 222 were bank examiners ) and 43 belonging to other bis central bankers ’ speeches areas of professional specialisation. as i shall now explain, it is naturally this area that has been and should continue in the future to be the focus of the efforts to adapt to the ssm. the functioning of the ssm let me very briefly describe the core characteristics of the ssm. the new banking supervisory authority has two components : the european central bank, accommodating the new supervisory board, and the national supervisory authorities. it makes sense for the ssm to be called a “ mechanism ” because what is actually involved is an institution made up of different interconnecting cogs and wheels. the mechanism is based on cooperation arrangements entailing decision - making by the supervisory board and, ultimately, by the ecb governing council, which remains the maximum decisionmaking body, and by the national supervisory authorities, which continue to play an essential role, since they will provide most of the human and material resources for the mechanism and combine the experience and knowledge of the different national banking systems. the banks of the countries participating in the ssm have been divided into two groups of significant and less significant institutions. the ecb will exert “ direct supervision ” over the former ; as regards the latter, it merely assumes “ indirect supervision ” functions, as the national authorities will in fact continue to be responsible for their effective supervision. a list of 120 significant banking groups has been

risks and expand employment was accentuated and extended by the corporate accounting and governance scandals that surfaced in the aftermath of the decline in stock prices and also, of course, by the environment of heightened geopolitical tensions. even now, following the pattern of recent quarters, corporate investment in fixed capital and inventories apparently continues to fall short of cash flow. the protracted nature of this shortfall is unprecedented over the past three decades. moreover, the proportion of temporary hires relative to total employment continues to rise, underscoring that business caution remains a feature of the economic landscape. that said, there have been much clearer indications over recent months that conditions in the labor market are improving. most notably, gains in private nonfarm payroll employment have averaged about 200, 000 per month over the past six months, up sharply from the pace of roughly 60, 000 per month registered over the fourth quarter of 2003. the improvement in labor market conditions will doubtless have important follow - on effects for household spending. expanding employment should provide a lift to personal disposable income, adding to the support stemming from cuts in personal income taxes over the past year. in addition, the low interest rates of recent years have allowed many households to lower the burdens of their financial obligations. although mortgage rates are up from recent lows, they remain quite attractive from a longer - run perspective and are providing solid support to home sales. despite the softness of recent retail sales, the combination of higher current and anticipated future income, strengthened balance sheets, and still - low interest rates bodes well for consumer spending. consumer prices excluding food and energy - so - called core prices - have been rising more rapidly this year than in 2003. for example, the twelve - month change in the core personal consumption expenditures price index stood at 0. 8 percent in december of last year and climbed to 1. 6 percent by may of this year. core inflation, of course, has been elevated by the indirect effects of higher energy prices on business costs and by increases in non - oil import prices that reflect past dollar depreciation and the surge in global prices for primary commodities. but the acceleration of core prices has been augmented by a marked rise in profit margins, even excluding domestic energy corporations. this surge in profits reflects, at least in part, the recent recovery of demand after a couple of years during which weak demand led to relatively heavy price discounting by businesses. profits of nonfinancial corporations as a share of sector output,