have accumulated more debt as a result. further accumulation of debt might prove unsustainable for firms with a high level of indebtedness. here, public support in the form of temporary equity injections could be an option to explore, especially in the case of large companies where this option seems more feasible. the spanish government has already set up a public fund that can be used for that purpose. for other firms, direct grants could be considered. debt restructuring could be a beneficial option for both lenders and borrowers in the case of highly indebted firms with a viable business. to smooth this process, insolvency mechanisms should be improved to make them more efficient. in spain, these procedures tend to be very lengthy, taking an average of three - and - a - half years7, destroying company value in the process, and in many cases lead ultimately to the piecemeal liquidation of the firm. to prevent the congestion of courts, out - of - court settlements could be incentivised. and in the medium to longer term, resources devoted to specialised courts could be strengthened with the aim of speeding through the resolution of these processes. in the case of firms with no viable business model, an orderly exit from the market should be provided for. a prompt resolution of this process will benefit the structural adjustment of the economy and the reallocation of resources towards more productive firms. four, our goal should be to ensure that the present crisis neither gives rise to a widespread tightening of financial conditions nor causes serious damage to our financial system. in the context i have described of an uneven and uncertain recovery, we cannot rule out the possibility that the risks identified may materialise or that their impact and persistence may be greater than expected. in this sense, in the banking sphere, the response to the possible materialisation of these risks can only be at the european level, given the commitment to the banking union. in this response, the completion of banking union with the launch of a fully mutualized european garcia - posada, m. and r. vegas sanchez ( 2018 ) : “ bankruptcy reforms in the midst of the great recession : the spanish experience ”, international review of law and economics, 55, pp. 71 – 95. deposit insurance scheme would make a decisive contribution to ensuring financial stability in the euro area, in the coming months and in the medium term. it is also crucial to analyse how appropriate the european regulations for resolution and winding - up of credit institutions

macroprudential and microprudential requirements on capital and liquidity for european banks were relaxed. additionally, the european regulation on capital requirements was reformed, with rule changes affecting sovereign exposures, impairments on nondefaulted exposures, sme support factors and software deductions, among other elements of bank capital calculation. these latest regulatory changes generally involve an increase in banks ’ capital ratios. in order for banks to preserve loss - absorption resources in the near future, the ecb and national authorities asked banks to halt dividend distributions until 1 january 2021, and also to refrain from share buybacks and to apply moderate variable remuneration policies. accounting rules have been adapted to allow full recognition of the benefits of credit support policies such as government loan guarantees, and to avoid the mechanistic reclassification as non - performing of loans to borrowers with temporary liquidity pressures, but with a sound solvency position. the available evidence suggests that these measures have contributed to easing firms ’ financing conditions. for example, the results of the bank lending survey show that, in the second quarter of this year, spanish banks eased credit standards in the segment of lending to firms. this behaviour contrasts with the significant tightening in those standards observed after the lehman bankruptcy in october 2008. apart from the quick and forceful policy response, the different reaction of credit supply this time may also be related to the better starting financial position of the banking system and, in particular, the higher capital buffers accumulated by banks in recent years that allow them to absorb credit losses. also, the different nature of the current crisis has probably played a role. the covid - 19 crisis originated outside the economy and the financial system, whereas the great financial crisis broke as a result of imbalances in the financial system. in fixed income markets, credit conditions, which tightened significantly between endfebruary and mid - march, started to improve after the announcement of the introduction of the pepp on 18 march. in particular, the average yield of investment - grade long - term bonds issued by spanish companies fell by around 100 bp thereafter, standing currently at 20 bp above the pre - crisis level. firms have taken advantage of the improvement in financing conditions in both bank lending markets and fixed - income markets and have resorted to debt to cover part of their higher liquidity needs. the year - on - year growth rate of debt increased from 1. 3 % in february to 6. 2 % in may. since then