effectiveness of economic policies in alleviating its effects on households and firms. economic policies ( national, european and international ; monetary, prudential and fiscal ) should continue to support the economy, targeting the hardest - hit firms and population cohorts. in particular, supporting viable firms whose solvency has deteriorated after a year of crisis is crucial, to prevent the productive system and employment from being destroyed, which in turn would also damage the banking sector ’ s financial position, thereby hindering the recovery. that would allow the banking sector to remain part of the solution to the crisis, by lending to households and firms, and to contribute to the economic recovery once the pandemic is over. the sector should also focus on tackling the challenges it faced before the pandemic, such as low profitability, as well as new risks, notably those stemming from intensive technology use and climate change. thank you.

european financial institutions ’ balance sheets. eu member states should also move swiftly to reach an agreement on creating a common european procedure for the administrative winding - up of credit institutions. this procedure would benefit from the instruments developed for the resolution of credit institutions, aiming to maximise the realisable value of the financial assets that make up the bulk of banks ’ balance sheets. in spain, recent experience has shown how inefficient the existing insolvency proceedings for credit institutions are in terms both of timelines and recovery in value. it would, therefore, be desirable for progress to be made in determining an administrative mechanism for winding up credit institutions that maximises the preservation of value and reduces both the timelines and the costs of the existing insolvency proceedings. the need to address the long - term challenges if the current crisis has done anything it has been to underline the importance of having a healthy banking sector with sufficient buffers to absorb unexpected risks. in this connection, going forward we must ensure that the banking sector remains resilient to any new risks that might emerge. completing basel iii and expanding the macroprudential toolkit available to the banco de espana are two particularly important avenues of work. to more accurately measure the risks assumed by banks and thus reinforce the credibility of their capital ratios, particular focus was placed on the calculation of risk - weighted assets ( rwas ) in the second phase of the basel reforms, approved at the end of 2017. standardising the treatment of rwas across institutions was considered necessary. the output floor is a key part of the reform to achieve this goal. the floor limits the benefits banks can derive from using internal models to calculate minimum capital requirements vis - a - vis the standardised approach, which does not require the use of models and is much less sensitive to new information. while impact analyses reveal that the reform would increase capital requirements in some jurisdictions, they also show that certain facets of the reform would lower them. specifically, some of these latter facets have already been implemented via the european quick fix i mentioned earlier. 14 the objectives of this second phase of the basel iii reform, which consist of balancing simplicity, comparability and risk sensitivity, remain wholly in place. thus, after deciding to defer implementation by one year so as to increase banks ’ operational capacity, all members of the basel committee on banking supervision ( bcbs ) have committed to its full and consistent implementation on the new date agreed. the economy and financial