democracy, encompassing areas as important as privatisation, the labour market and social security reforms, and the liberalisation of numerous markets ; notwithstanding, as i shall indicate later, that there is still considerable work outstanding in this area. an excellent example of these reforms is the transformation the spanish financial system has undergone. here, the efficiencies generated by liberalisation contributed to all players, in general, turning in a sound performance : bank and savings - bank managers, trade unions and employers'associations, governments and the financial supervisor all thus helped bring about an industry which is today held in worldwide esteem. nonetheless, although these macroeconomic and microeconomic policies no doubt brought their weight to bear, it would be very difficult to explain what has happened in spain without turning to other more structural causes. one essential factor of growth in recent decades has been the change in the level of spanish educational achievement in the 70s and 80s, which meant that those joining the labour market in the 90s had a far higher level of educational attainment than that of previous generations. and as well as higher education, these new entrants were also much greater in number than their predecessors. this indigenous population growth has been reinforced in recent years by the phenomenon of immigration, and has been an essential explanatory factor of our recent growth. in addition to the foregoing causes, which can be quantified, there are others that are more difficult to measure since they refer to qualitative aspects, but which are equally relevant. thus, for instance, spanish trade unions have progressively adopted a bargaining strategy more in keeping with the requirements stemming from spanish euro area membership and with the challenges posed by globalisation, and that has been conducive to employment generation and the growth of the spanish economy in recent years. something similar may be said of the substantial continuity over time of the broad thrust of economic policy, irrespective of the different governments that have successively been in power. such continuity has also impregnated the natural debate under democracy between the various policy options. underpinning this debate has been a degree of agreement on the importance of stability - oriented macroeconomic ( fiscal and monetary ) policies and the microeconomic policies geared to improving the workings of markets. and this is not something that is found in all developed countries. specifically, continuity in privatisation and market liberalisation policies, which has placed spain in a leading position in continental europe and has contributed significantly to the growth in the past 20 years

are for a hypothetical systemic crisis, or the possible role that asset management companies may play in the event of severe impairment of european financial institutions ’ balance sheets. the eu member states should also make swift progress towards an agreement to create a common european procedure for administrative winding up of credit institutions. this procedure would benefit from the instruments developed for resolution of credit institutions, aiming to maximise the realisable value of the financial assets that make up the bulk of banks ’ balance sheets. finally, with a more medium - term perspective, other structural policies may facilitate the change in the composition of firms ’ liabilities towards a higher share of equity, such as the reform of the corporate tax treatment of liabilities and progress in the capital markets union project. i will focus on these two issues in the last part of my speech. current corporate tax regulation in spain and in other european countries gives preferential treatment to debt as opposed to equity, since interest payments are deducted when calculating the tax base for corporate income tax. this bias makes issuance of debt more attractive to firms than issuing equity. in this regard, a more neutral corporate tax system that treats these two instruments equally would incentivise a higher resort to equity. another friction that may discourage firms from issuing equity is the underdevelopment of equity markets in europe compared to other areas such as the united states. in this connection, one of the aims of the capital markets union project is to foster the development of these markets through different actions, including the removal of barriers that prevent the integration and development of capital markets. the development of equity markets can have several benefits for the corporate sector and for the economy more generally. the resort to equity finance improves the robustness of corporate balance sheets, as a higher share of equity makes firms less vulnerable to adverse shocks such as an increase in interest rates or a fall in earnings. 8 this is because equity is not a redeemable liability. also, equity is a more appropriate instrument for the financing of high - risk projects such as those involving startups, intangibles and innovation. access to bank lending is more difficult for the financing of these activities because capital charges are generally higher and because often these assets cannot be easily pledged as collateral. 9 insofar as these activities evidence, as the empirical evidence suggests, higher average productivity, the development of equity markets can make a positive contribution to economic growth. 10 finally, the development of equity markets, together with the reduction in the home country bias in