the somewhat puzzling fall in aggregate productivity growth in the aftermath of the crisis. this holds true for non - financial companies in both advanced countries and, above all, emes. the firm - level analysis highlights a structural change in the evolution of productivity across companies and sectors : from a single cutting - edge group of “ incumbent ” companies bis central bankers ’ speeches displaying high levels – but low or negative growth rates – of productivity to the emergence of a second group of “ high - growth ” companies characterised by faster productivity growth. this finding suggests that it is critical to understand the drivers that underlie these changes. the report rightly emphasises the impact that corporate finance decisions may exert on productivity. four financial strategies are identified that make a difference between high and low productivity growth at a company level : higher spending on r & d ; lower debt - to - equity ratio ; higher free cash flow ; and more m & a deals. the analysis sheds lights on critical macro - financial linkages. what i find very instructive is that these strategies are all part and parcel of the structural policies that are called upon to trigger economic risk - taking, investment and ultimately growth. as far as financial markets are concerned, two fundamental drivers of change are technology and regulation. this is well documented in the chapter of the report on stock markets, which i find particularly insightful. here, there seems to be an issue of finding the right balance between the advantage of having more numerous and more specialised trading venues and the disadvantage of fragmenting trading liquidity. the possibility to trade a listed share in various markets promotes competition among providers of financial services. the availability of “ dark ” trading venues ( i. e. with little transparency in pre - trade information ) seems to allow institutional investors and other large players to place sizeable orders without giving rise to adverse price changes. on the other hand, it is important that such “ dark ” trading pools do not undermine a level playing field and a correct handling of conflicts of interest. putting the various types of trading venues on a more even footing is the objective of some recent regulatory initiatives in advanced countries. the availability of consolidated real - time price and volume data to market participants is another important factor. the report also considers under the notion of fragmentation issues related to the fundamental heterogeneity of economic agents and conditions. a case in point is life expectancy, which varies greatly ( both in levels and trends ) across individuals depending on socio - economic factors such as education

pablo hernandez de cos : how to preserve pandemic - struck viable firms for a stronger recovery introductory remarks by mr pablo hernandez de cos, governor of the bank of spain and chair of the basel committee on banking supervision, at the european systemic risk board ( esrb ) virtual seminar on “ corporate insolvencies and public support measures ”, 29 april 2021. * * * many thanks to the esrb secretariat for organising this seminar. and let me also thank and welcome all participants to this event. i will devote these brief opening remarks to outline why, at the esrb, we consider the topic of the seminar “ corporate insolvencies and public support measures ” a very relevant and timely one. the starting point is our perception that, in the context of the current crisis, even if the macrofinancial outlook has improved, uncertainty remains high. and one of the main elements of this uncertainty is precisely related to the extent of the damage inflicted by the crisis on the corporate sector, whose magnitude will be a key determinant of the persistence of the crisis and the strength of the economic recovery. therefore, we need to measure this risk carefully and be ready to adapt our policies to mitigate it to the extent possible. and this is particularly relevant in the current phase of the crisis. in the first phase, the crisis generated a significant decline in firms ’ revenues relative to fixed costs ( such as supplies, rentals, labour costs ) that led to an increase in firms ’ liquidity needs on top of those derived from the amortisation of pre - existing debt. in turn, this raised the risk that some of these corporates would not be able to meet their payment obligations ( liquidity risk ) together with a non - negligible probability of negative spillovers to other companies. the decisive and forceful action of economic policies has helped mitigate this risk to a great extent, so that a large proportion of these firms with liquidity needs were able to cover them. key measures included, for example, furlough schemes that help to alleviate fix costs, and also public guarantees for business financing that have allowed for the liquidity needs to be financed. however, as the crisis unfolds, concern is shifting from liquidity risk to the deterioration of the solvency position of firms, associated with the combination of higher levels of debt as a result of the crisis with still low profitability expectations for the coming quarters, especially in sectors most impacted by the crisis and