##tisation markets activity was seriously impaired after the subprime crisis due to the stigma attached to any kind of asset - backed securities, and the lack of recognition by investors and regulators of the specific quality of each product. to address some of these problems, the european commission has recently published an interesting proposal for amending the european regulation on prudential requirements for credit institutions and investment firms that introduces a differentiated treatment for high quality securitisations that meet stringent standards in terms of simplicity, transparency and standardization. 5. concluding remarks let me now conclude by highlighting what i think are the main lessons drawn from the recent crisis in connection with credit developments. first, it seems clear that given the large financial imbalances that emerged during the expansionary years, a protracted contraction in credit demand seems not only unavoidable but also positive to restore the ability of the economy to grow on a sustainable basis. yet there is little doubt that frictions on the supply side amplified the contractionary effects of weak demand and that those frictions merit bold policy attention. in any case, policy interventions aimed at revitalising credit during a crisis should be carefully designed and calibrated, duly taking into account that credit flows should not be expected to fully recover until lenders ’ and borrowers ’ balance sheets are on sufficiently firm ground. in the case of spain, some of the main constraints affecting credit developments for most of the recent crisis have abated considerably as a result of the improvement in the macroeconomic outlook, the bold banking sector reform and the introduction of various measures at both the national and european level. these positive developments, however, should not be taken as conclusive evidence that the task is complete and that all relevant risks have been dispelled. rather, the consolidation of the recent positive signals in the macroeconomic and financial spheres requires resolve to complete the reforms still pending on various relevant fronts. this should, in my opinion, be bis central bankers ’ speeches the main priority in seeking to enhance economic growth prospects on a sustainable basis and to mitigate the volatility of the financial and economic cycles. thank you very much for your attention. bis central bankers ’ speeches

the publication of the estimates of capital needs, based on the stress tests performed by an independent appraiser, supported by audit firms and real estate appraisal companies under the supervision of the european commission, the european central bank, the international monetary fund and with the participation of the ministry for economic affairs and the banco de espana. i will not repeat here the figures already published and explained and which were yesterday commented on by the minister for economic affairs and competitiveness before the economic affairs committee. bis central bankers ’ speeches however, i do want to say that the exercise performed is unprecedented in terms of its depth and detail, the severity of the macroeconomic assumptions accepted and the scrutiny to which it was subject throughout by experts from the institutions i have mentioned above. but there is still some way to go in the clean - up and restructuring of our banking system. the memorandum of understanding signed last july sets out the steps now to be taken, which the spanish authorities – and, rest assured, the banco de espana – will comply with as precisely as possible. the restructuring or resolution plans for banks owned by the frob must be approved before december 2012. also, before november, we shall have at our disposal the recapitalisation plans of banks which cannot meet their capital shortfall without state aid, on the understanding that banks which are not considered viable will be resolved orderly in accordance with the terms of the corresponding resolution plan. banks that can meet their capital shortfall without resorting to state aid will be required to implement their recapitalisation plans before june 2013. the other key component of the clean - up programme is the asset management company which should be operational at the beginning of 2013. it is key because it will permit the clean - up of the banks requiring state aid to be completed and will provide a suitable horizon for the management and sale of the mass of assets to be transferred. conclusions the budget for 2013 involves a considerable drive in respect of fiscal adjustment. it attempts to bring about a correction in the primary deficit, net of interest on public debt of almost 2. 5 pp of gdp. in the depth of a recession, that is very difficult, but necessary in order to meet the targets to which spain is committed within the framework of the european union and the euro area. we have some data which, although not warranting excessive optimism, do indicate that an adjustment is being achieved. we are going to end 2012 with a current account almost in balance, and in 2013 it will probably run