least skilled – is essential to reduce this scourge and thus help correct the strong rise in wage inequality that stemmed from the crisis. in this respect, it would be desirable to improve the human capital of the least skilled unemployed and to align job training measures to employers ’ demands. these measures should be structured to fit others aimed at reducing the high temporary employment ratio, in light of its negative influence on human capital accumulation – to which i shall refer later – and, once again, on inequality. indeed, despite trending more favourably over the past year, the temporary employment ratio stood in 2019 q1 at almost 26 %, far above that in other european countries. reducing it will necessarily involve raising the attractiveness of permanent hiring for firms. finally, let us turn to the banking sector. major challenges, in many cases shared with other european banking systems, remain outstanding, despite the progress made in recent years. for one thing, the spanish banking sector should speed up the reduction of its non - earning assets, since these not only bear down on its profitability but also on its capacity to allocate 9 / 18 resources efficiently. this aspect is particularly relevant in spain ’ s case, where the recourse by smaller - sized firms to external funding is mainly through bank loans. next, in addition to enhancing the quality of their assets, spanish institutions should strengthen their capital and the liabilities susceptible to be used in the event of bail - ins in order to face on the best footing the regulatory challenges still pending. as in other countries, the new technological environment poses a challenge. but it is also an opportunity for the financial system, which the spanish banking sector should harness. finally, financial institutions should seek to enhance their reputation. this challenge should not be neglected if they are to successfully tackle an environment like the current one, which is becoming more competitive as new agents emerge ( e. g. the so - called fintech ). in an economy like spain ’ s, where the banking sector continues to mediate most financial flows, overcoming these challenges is crucial if deposit institutions are to continue contributing to economic growth. the productivity challenge in recent decades the increase in total factor productivity ( tfp ), which measures the efficiency with which productive factors are used, has been notably meagre in spain. indeed, tfp posted negative growth rates for much of the 2000s. in spain, it has averaged growth over the past 20 years of approximately 0. 2 %, 0. 2 pp less

from the forthcoming updates of the banking packages – the capital requirements regulation and directive and the banking resolution and recovery directive ( crr iii / crd vii / brrd iii ) – to the review of the fiscal and economic rules – known as the two - pack and six - pack – which is scheduled for the end of this year. 3 / 4 bis central bankers'speeches conclusion recent experience shows that policy answers need to evolve in line with the challenges of the time and that all policy areas need to contribute. within their mandates, central banks will continue to take policy challenges into account to ensure their measures are effective. the press plays an important role in informing the public about the ecb ’ s measures and critically challenging its decisions. in my view, this dialogue with you, the press, supports the effectiveness of the ecb ’ s measures. so let ’ s start this dialogue here and now. 4 / 4 bis central bankers'speeches