adopt basel ii. members of the basel committee believe that it is beneficial to move in the direction of basel ii, but no country should adopt basel ii if it feels that it is not yet ready. if a country does decide to adopt basel ii, the timing should be determined by its own circumstances, not the timetable for basel committee members. i hope you will pardon my pronunciation, but i am told that there is a turkish proverb that says “ hamama giren terler, ” or “ he who enters a turkish bath sweats. ” if i understand correctly, the point of this proverb is that you should understand the consequences of your actions. if the result is to be very positive, some work and thus some sweat is required. i don ’ t know whether adopting basel ii is similar to entering a turkish bath, but i do know that it is important to understand that this is a high - quality and demanding standard. unlike the 1988 accord, which was relatively simple to adopt, basel ii is more complex and demands more of banks and supervisors. therefore, we don ’ t expect basel ii to be adopted as widely and quickly as the 1988 accord, at least at the outset. however, we do believe it is appropriate for all economies, and we expect and hope that the number of countries that adopt the new framework will grow over time. we believe that countries should adopt the options and approaches that are most appropriate for the state of their markets, their banking systems, and their supervisory structures. basel ii is not a “ one size fits all ” framework. supervisors can adopt the framework on an evolutionary basis and use elements of national discretion to adapt it to their needs. for any country that is considering adopting basel ii but may not yet be ready, i like to suggest a three - stage approach towards building a foundation for the new framework : ( 1 ) strengthening the supervisory infrastructure ; ( 2 ) introducing or reinforcing the three pillars ; and then ( 3 ) making the transition from the 1988 accord to basel ii. the first stage is strengthening the supervisory infrastructure. basel ii is not intended simply to ensure compliance with a new set of capital rules. rather, it is intended to enhance the quality of risk management and supervision. one of the things that i strongly encourage for all countries is a review of implementation of the basel committee ’ s core principles for effective banking supervision. these principles are key to laying a successful supervisory foundation. likewise, sound accounting and provisioning standards are critical to ensuring

grown by 1 % in the second quarter of this year. this growth rate highlights the dynamism of the current recovery phase, now under way for two years. recent indicators suggest this expansionary trajectory will hold in the second half of the year. on the latest banco de espana estimates, gdp growth should be slightly over 3 % this year and somewhat below that figure in 2016, meaning that growth in our economy will continue to outpace the euro area average. in terms of composition, national demand has continued to expand strongly. after several years of containment in household spending plans, the favourable course of their disposable income coupled with brighter job prospects and readier access to credit have been conducive to the growth of consumption. real estate market indicators show a recovery in the sector which, while moderate and uneven across market segments and regions, is also contributing to rekindling household spending. the buoyancy of final demand and the progressive normalisation of financial conditions have continued exerting a positive effect on business investment. the firming of the recovery in the euro area economy has helped compensate for the recent loss of momentum in some non - community markets, meaning that exports maintain high growth rates. ongoing contributing factors are the gains in competitiveness in our economy, which reflect the containment of costs in recent years by spanish firms and, more recently, the depreciation of the euro. nonetheless, imports have responded forcefully to the pick - up in domestic spending ( we should remember that gains and losses in competitiveness are felt abroad but also at home, in respect of imports ), which has led, in net terms, to external demand generally not contributing to the increase in activity. the recovery in output has come in step with a more expansionary behaviour of employment than might have been foreseen on past patterns. according to official spanish labour force data, from the second quarter of 2014 to the same period this year numbers employed are estimated to have increased by more than half a million, making for an appreciable reduction in the unemployment rate. bis central bankers ’ speeches the greater flexibility enjoyed by firms, following the reforms approved in 2012, in adjusting their working conditions to the macroeconomic and competitive setting has no doubt provided for the creation of new jobs and, therefore, for the expansion of economic activity. if the dynamics of the past 18 months hold, the increase in employment might place the unemployment rate at around 20 % in the fourth quarter of 2016. as to prices, the