( p. p. ) to 10 p. p. for non - financial corporations, and from 20 to 10 p. p. for families. since the start of the recovery, the reduction in the indebtedness of the private sector as a whole has not prevented new bank lending from flowing to borrowers with potential profitable projects and / or a good export performance. the share of companies whose credit stock has not declined has shown an increasing trend in the last two years and the rate of decline of nfc aggregate debt has moderated. with regard to the public sector, the ratio of debt to gdp is expected to have stabilised in 2015, according to the official targets. should that aim have been accomplished, the upward trend in public debt commencing 2008 would have been finally controlled after an increase of 60 points of gdp. the basis of the recovery : the structural reforms now, i will briefly elaborate on the main reforms which have been the basis of our recovery. these reforms have been oriented towards increasing the flexibility and competitiveness of the economy and addressing previous imbalances. for the sake of brevity, i will concentrate on the labor market reform, the reforms to ensure budgetary discipline and sustainability, and the reforms on the public pension system. labor market reform the labour market reform has been key in the process of correcting the imbalances of the spanish economy, where we can mention, first of all, the losses of competitiveness accumulated between 2002 and 2008 and very high unemployment. the reform approved in 2012 made important changes in the institutional framework, including a reduction in the degree of centralisation of the collective bargaining system, an alleviation of dismissal costs and of the complexity of procedures, and a widening of hiring possibilities. bis central bankers ’ speeches in a nutshell, the reform attempts to avoid repeating the previous pattern under which firms adjusted to an economic slowdown either by dismissing workers or by closing down, providing firms with increased flexibility to link wage negotiations to their particular economic conditions, and the possibility of opting - out from sectoral agreements, giving greater priority to firm - level ones. fiscal adjustment the spanish economy has made visible progress in the redressing of fiscal balances towards levels that are compatible with the sustainability of public finances. the adjustment has required strong measures both on the revenue and the expenditure sides. from near double digit deficits in the early years of the current decade, the deficit was reduced to 5. 9 % of gdp in 2014. the commitments with

; the sanitisation of bank balance sheets ( recognition and treatment of bad assets ) ; and the recapitalization of individual institutions and the entire system. the levels of solvency of the spanish banking system are currently well above regulatory minimums. the top quality capital ratio, namely common equity tier 1 or cet1, of spanish banking institutions stood last june at 12. 4 % ; and the overall capital ratio was 14. 3 %, far exceeding the regulatory minimum levels. regarding domestic business, since early 2014, non - performing loans ( npls ) have continued to decline, in line with the pick - up in economic activity. the refinanced or restructured credit to the resident private sector has also been declining. this has enabled the npl ratio to fall to 11. 2 %. even so, for historical standards, the volume of npls and foreclosed assets on institutions ’ balance sheets still remains high. total consolidated profits of spanish banks have continued the recovery initiated in 2013, with the return on equity ( roe ) standing at 9. 2 % and the return on assets ( roa ) at 0. 63 % in june 2015. the improvement was due both to an increase in net interest income – driven by positive developments in business earnings outside spain from internationally diversified banks – and to the containment of certain costs which pushed down profits. these costs refer, on the one hand, to operating expenses ( employees and offices restructuring ), and, on the other, to the decline in asset impairments as a result of the provisioning efforts already made and the recovery of the economic activity. i would note that the subsidiary model followed by the main spanish banking groups for their international expansion, with high local autonomy, benefits from certain characteristics which, i dare to say, are not always well understood. to mention one of its main distinctive features : in this model, subsidiaries are autonomous in both capital and liquidity, therefore, limiting the contagion risk between the group ’ s units, while benefitting from revenues and risk diversification. it is well known by markets and supervisors that this model helped the spanish banking sector and the spanish economy through the financial crisis. banking business today has to face rapid technological change, new regulations, growing competitive pressure and low interest rates. these challenges are shared by many different banks throughout the world and, obviously, are not exclusive to the spanish banking system. but now i will focus on the three main sources of pressure on the domestic income statement