that there is enough recapitalisation capacity in resolution, one - third of the minimum tlac requirement is expected to be covered with instruments other than cet1 ( that is, debt ). it is important to bear in mind that the tlac establishes a common minimum global requirement and that national authorities have the right at any time to apply higher requirements in their jurisdictions. the tlac is a new prudential requirement that has different objectives than the capital ratio. regulatory capital is mainly to absorb losses in a going - concern situation, whereas tlac is meant to ensure loss absorption in gone - concern situations ( that is, beyond the point of nonviability ). i should add that, in a resolution context, the location of loss absorbing resources becomes very important and, for this reason, the tlac standard gives guidance on how these resources should be distributed within the banking group. this highlights another important difference between the capital framework and tlac : the location of resources. while the former is required on a consolidated basis for the group as a whole, tlac is required where resolution takes effect and where critical functions are performed. one of the most complex issues in the design of the tlac was the need to ensure consistency between the two main banking resolution strategies : the single point of entry and the multiple point of entry. under a single point of entry strategy, resolution actions will be taken in a single legal entity that is basically the parent company of the group, which will have to hold sufficient external tlac. additionally, a certain amount of loss - absorbing capacity should be pre - positioned in all material subsidiaries. this would ensure that losses are up - streamed to the resolution entity, thus avoiding putting the material subsidiary into resolution. by contrast, under a multiple point of entry strategy, the application of resolution tools to different parts of the group is allowed under the assumption of limited interconnections between them. therefore, in this model, loss - absorption capacity is primarily located in each resolution entity ( subsidiaries and the parent company ). this is the resolution model chosen by the global spanish banks as it is a better fit with their business model. as i said, one of the most complex issues in the design of the tlac standard was to find the correct balance between taking into account the particularities of each resolution strategy and ensuring consistent treatment between them. in this respect, the bank of spain welcomes the inclusion of certain elements that go in

##growing the rate of expansion of the very markets on which they are targeted, which reflects the gains in competitiveness i referred to earlier. but i believe mention should also be made of a structural change, namely the most notable growth in the number of spanish companies permanently – not just occasionally – orienting their activity towards foreign markets, without forgetting the gains in market share in their domestic markets, as gains in competitiveness enable firms to compete better not only abroad but also, obviously, in the domestic market against imports. risks the spanish economy has moved into 2018 on the back, we may say, of significant expansionary inertia. on the external front, and in europe as a whole, we do not yet know and it is not easy to estimate the impact that the united kingdom ’ s exit from the european union may have, the impulses that the protectionist policies in various countries are prompting and the effects that may stem from the re - balancing of the chinese economy. in the financial domain, the valuations of certain assets in some jurisdictions and segments of the capital markets have increased most markedly, suggesting that there has been an increase in the risk of there being corrections in the coming years potentially affecting financial stability. i would also like to refer to the economic risks posed by the political situation in catalonia. in our financial stability report, published early last november, the banco de espana estimated a range for the economic impact of the tensions in catalonia drawing basically on assumptions about their duration and intensity. the conjunctural information for the final 5 / 6 quarter of 2017 indicates that economic activity is expected to have slowed in catalonia in the closing months of the year to a greater extent than in the other main regions with the greater gdp ; at the same time, it seems clear that the application of article 155 of the constitution has contributed to easing economic tensions, as shown by recent developments on financial markets, where a correction has been observed in the higher volatility and more negative dynamics that stock markets and the spanish sovereign debt risk premium had experienced in the opening weeks of october. indeed, the risk premium stood today below 85 basis points relative to the german benchmark, the lowest level since 2010, following the upgrade announced by a rating agency. if in the coming months we achieve normalisation, understanding by normalisation a situation in which political agents act with a real observance of our entire legal framework to the letter, and i would stress real observance, that would very likely lead to a