to address and which had only been but partly expected in the prior expansionary phase. the second is the cross - sectional dimension, through the various intermediaries making up the financial system. this dimension derives from specific structural characteristics of the financial system that may amplify the impact of any shock to it. indeed, the financial system is made up of highly heterogeneous institutions, in terms both of size and complexity. in turn, these institutions are very closely interconnected, both through direct exposures in the interbank market and indirect exposures : exposure to the same economic sectors or even to the same agents ( firms or the public sector ). both the diversity of the players and their close interconnectedness notably improve the efficiency of the system, since they provide maximum specialisation in risk management. but they are also a cause of vulnerability, since the potential difficulties of one institution can swiftly pass through to the rest. this is particularly the case for banks of greater systemic importance, whether because of their size, their complexity or their central position within the system. one of the best examples of the importance of this dimension for systemic risk is also to be found in the global financial crisis. the us insurance company aig had not been a major originator of sub - prime mortgage loans. however, it had sold financial insurance instruments against the potential default of the securitisations of these loans ( cdss ) to its clients, who were, above all, other financial institutions. the contagion effect to the rest of the financial system that the bankruptcy of aig would have caused was on such a scale that it led to its bailout by the us authorities. but the mere expectation of this type of bailout can affect managers ’ risk - taking decisions in periods of expansion, which may be excessive precisely because they expect to be bailed out in the event of difficulties. this is the wellknown “ too big to fail ” problem. the multi - dimensional nature of systemic risk means that macroprudential policy needs an extensive range of tools ( or instruments ) to allow it to tackle each of those dimensions as efficiently as possible. moreover, given that a wide variety of institutions with greatly diverse characteristics operate in the financial sector, these instruments should be adjusted to their particularities. in this respect, the significant interconnectedness of these financial system players calls for an all - encompassing overview when taking macroprudential policy decisions. and this requires close coordination among key institutions if

this backdrop we have, at the banco de espana, monitored different indicators during the crisis that measure the presence of systemic tensions in financial markets, which prove useful for identifying the start of a systemic crisis. these indicators showed, in fact, a very pronounced increase in the opening months of the pandemic, but an improvement subsequently. in any event, our benchmark indicator in the current situation has been the output gap, i. e. the difference between the actual and potential level of output, which reflects the persistence of the impact of the crisis on gdp. this output gap has stood at very negative level since the crisis began ; accordingly, given that the objective of macroprudential policy is to act countercyclically, it does not seem reasonable to activate the macroprudential instruments, despite the fact that the credit - to - gdp gap may be above 2 pp. at the european and global level – in different agencies such as the ecb, esrb, eba, bcbs and fsb, among others – various coordinated decisions in this economic policy area have been taken. one notable example was the introduction of recommendations for restrictions on the distribution of dividends by banks and on variable remuneration. their uniform application to all banks, by financial system sector and country, conferred a significant macroprudential dimension on this action, by contributing to preserve the capital of banks as a whole. a recent banco de espana article8 finds that this measure has, in conjunction with other measures adopted, enabled the provision of bank lending to the productive sectors of the economy to be increased. also, the esrb has during the crisis analysed various issues, such as : i ) the implications for the financial system of the public guarantee programmes and other fiscal measures to protect the real economy ; ii ) the lack of market liquidity and its consequences for asset management and insurance companies ; iii ) the procyclical impact of debt downgrades on markets and financial institutions, and iv ) the liquidity risks derived from margin calls. these avenues of research led to a set of recommendations for the eu member states ’ authorities to act in unison on the appropriate monitoring of the risks and vulnerabilities identified and on potential measures to mitigate them during the crisis. the future of macroprudential policy allow me to conclude with some brief thoughts on the future of macroprudential policy. in my view, there are two aspects on which we should focus in the coming years.