31. 082017 welcome address first annual research conference of the banco de espana luis m. linde governor buenos dias, good morning to everybody. let me welcome you all to the first annual research conference of the banco de espana. we plan to make this conference our main research event each year. so, we hope that today ’ s edition is the first of many to come. our aim is to bring together scholars and policymakers to express views and discuss on the key policy questions for central banking, both from an academic and a practical perspective. the conference reaffirms the banco de espana ’ s commitment to research as an indispensable tool for economic policy - making. good research strengthens the foundation of our policy framework and lays the groundwork for the models we use in our economic and monetary policy analysis. the banco de espana commits significant resources to research. let me give you some figures. currently, according to the ideas database, our bank ranks third in research among national central banks in the euro zone. in 2016, researchers at the bank published more than 30 working papers. indeed, research is not a matter of quantity, but of quality ; in the last few years our researchers have published in top journals such as econometrica, the american economic review, the journal of political economy, the various american economic journals and the journal of monetary economics, just to mention a few examples. over the last three years, fifteen young economists holding phds from renowned international universities have joined the bank ’ s staff. i am pretty confident that our research output will be improved and enhanced in the future. challenges for macroeconomic research today and tomorrow you will be talking essentially about macroeconomics. looking forward, macro policies, monetary, fiscal, and macroprudential policies, are facing a number of challenges that require deep theoretical and empirical analysis. perhaps, first of all, we need to understand the causes and consequences of the current levels of low inflation in most developed economies, despite the fact that most major central banks have introduced unprecedented monetary measures to support activity and growth. several explanations, ranging from a “ debt supercycle ” to a secular stagnation have been proposed. if natural rates at very low or even negative levels are here to stay, central bankers will have to rethink our standard toolbox and to decide which policy measures put in place during the last decade should be maintained. in this respect, i think that the first paper of the conference, which analyze

fernando restoy : challenges for banking resolution closing remarks by mr fernando restoy, deputy governor of the bank of spain and chairman of the frob ( the fondo de reestructuracion ordenada bancaria – fund for orderly bank restructuring ), at its conference, madrid, 4 june 2014. * * * introduction good evening. i welcome this opportunity to share with you some thoughts on banking resolution. i cannot think of a more qualified audience to discuss this matter than that invited by the frob for this conference, with representatives of competent authorities in the field, among others. i will organise my remarks as follows. first, i will briefly describe how i see the general global framework for banking resolution established after the crisis. next, i will review the special features of the european case. and finally, i will concentrate on the lessons to be drawn from the spanish experience, with a special reference to issues relating to the institutional design of banking resolution. the global framework for banking resolution after the crisis we all know that banking resolution has not achieved the status of a well - defined policy area until very recently. actions taken by authorities in relation to failing or likely - to - fail institutions have followed a discretionary case - by - case approach, particularly with respect to the availability of public funds to protect banks ’ creditors. the idea was that, as there was no ex - ante commitment to possible public bail - outs, the risk of moral hazard in relation to risk management policies and investors ’ decisions could be sufficiently contained. the recent crisis has however illustrated very clearly the limitations of this “ constructive ambiguity ” approach. thus, during the crisis, and in particular after the collapse of lehman brothers, the authorities have openly recognised that bank failures – even if they are not particularly large or complex – can seriously impair financial stability, making bail - out a natural policy response. as a consequence, there were widespread bail - outs of creditors of banks under stress. these rescues have obviously confirmed the existence of an implicit guarantee for banks ’ liabilities which constitutes a serious challenge for fiscal balances and a substantial distortion of the system of incentives for bank managers and fund providers. there is now broad agreement that in order to restore the socially desirable incentives and minimise the use of public resources, it is not enough to work on preventing bank failures by adopting appropriate regulatory and supervisory policies, but rather it is also necessary to be able to deal with non - viable banks in an orderly fashion and obviate the per