##bates, reductions bis central bankers ’ speeches and allowances be eliminated and that progress be made towards greater neutrality across savings instruments. these recommendations underline that is important that any future changes to taxation, in addition to improving efficiency, should not jeopardise the fiscal consolidation required. medium - term economic growth the fiscal consolidation process has been accompanied by a series of reforms whose effects are becoming discernible or will be perceived shortly. the increased sensitivity of prices to the economic cycle has prompted a correction of the competitiveness gap of the spanish economy, while the more flexible labour framework has undoubtedly been conducive to wage moderation. a change is also perceptible in the role of past inflation in the process of determining costs and income. this change will be bolstered by the implementation of the legislation on the deindexation of the economy. the effects in terms of job creation are more tentative, yet promising. foreseeably, as a result of the more flexible labour framework, employment will grow at rates which, while moderate, are relatively high in relation to the growth in gdp. undertaking reforms to increase competition is also unavoidable. progress in this area has also been significant : we may recall the laws on entrepreneurs, single market guarantee and insolvency. however, it must be acknowledged that in some cases their actual implementation is encountering difficulties or has been delayed. thank you. bis central bankers ’ speeches

financial sector. there is an inter - regulatory financial stability and development council ( fsdc ) which has oversight over the entire financial system and coordination is secured by a sub - committee of the fsdc headed by the governor of the rbi. banking sector first, let me turn to the banking system. typically, india's banking system is summarily described as preponderantly publicly owned and heavily public policy intervened. in practice, it is more vibrant, with 12 public sector banks facing keen competition from 21 private banks, 45 foreign banks, and 63 niche banks1 catering to specific needs and clientele. it is important to note that all constituents of the banking system are subjected to the same regulatory regime, with specific modulations for the niche and local banks in terms of sources and uses of funds. it is noteworthy that india has not faced a financial crisis of the scale and severity of the asian crisis of 1997 - 98 or the latin american crisis of 1980s and 2002 or the global financial crisis ( gfc ) of 2007 - 08 although its suffered knock - on effects from each of them. financial perturbations have happened in india though, but they were more local in character and essentially a manifestation of pro - cyclical exuberance. as the indian economy emerged out of recessionary conditions in 2001 - 02 and an economic upswing took hold, it spurred a credit boom to fund infrastructure expansion. masked by lax credit standards and opaque asset quality recognition, it was punctured by the onset of the gfc. india was among the earliest countries to bounce out of the 2 / 7 bis - central bankers'speeches gfc, and aspirations of double - digit growth fuelled another burst of bank credit - led infrastructure and heavy industry investment. on the premise that infrastructure involves long gestations, bank loans were allowed to be restructured while treating them as standard advances in banks'books with insufficient provisioning. in 2015 - 2016, deep surgery in the form of asset quality review ( aqr ) was undertaken and the true quality of banks'assets began to emerge. with the proper recognition of restructured loans, provisioning requirements, especially of public sector banks, surged. a revised prompt corrective action ( pca ) framework involving thresholds on capital, asset quality, profitability and leverage was imposed from 2017 in the form of restrictions on lending, dividend - distribution, and branch expansion, apart from requirement of higher provisions. at the peak, 12 banks were