permanent step - up in the cost of capital due to changes in attitudes towards risk among investors. these developments may also affect the rate of technological progress in the long run if, for example, they lessen the incentive to engage in innovative activities. and we cannot forget the risk of the observed increase in unemployment translating into a parallel increase in structural unemployment, an issue i will deal with later in my speech. therefore, structural reforms appear to be the only available tool to avert the risk of the crisis exerting more permanent effects on both the level of output and the growth rate of the economy. second, structural reforms cannot be seen in isolation from the other measures that are needed, in particular those stemming from the exit strategies, but rather as a necessary complement to them. as an example, the dramatic increase in fiscal deficits and government debt levels during the crisis, exacerbating fiscal sustainability concerns for a number of economies, would worsen if output losses were permanent and constrained government revenues and expenditures in the future. by the same token, growth - enhancing structural reforms may smooth acceptance of the fiscal adjustment or even reduce its magnitude if they prove to be effective. past experience shows that structural reforms are often adopted in times of economic crisis or prolonged episodes of slow or negative growth. this contrasts with the generalised view that it is easier to cope with these reforms, since their costs are generally less painful, and distributional effects less visible, when the economy is strong and income is growing rapidly. and the reasons for this cyclical pattern of structural reforms seem to be related to the fact that crises unmask weaknesses that were hidden by cyclical buoyancy, and these increase, at least partly, the social support for change. the labour market is clearly first among the structural reforms that are needed. for one thing, labour markets play a key role in the functioning of the economy, in particular as a mechanism for adjustment in the face of adverse shocks. and their functioning has implications for competitiveness and productivity, two variables crucial for the long - term growth of any economy and, in particular, for those countries participating in a monetary union, as is our case. likewise, there is sufficient evidence that labour market institutions play a key role as determinants of their sound functioning. in particular, we have evidence that labour markets have been pivotal in the response of the different economies to the current crisis. and they can play a central role in the persistence of the negative effects of the financial crisis

those savings to them, when they need them, on the terms agreed. in turn, credit institutions provide financing to customers, trusting that they will repay those funds on the terms agreed. likewise, customers conduct all their business with their banks because they trust them not to sell or reveal any information they have on them as customers. unfortunately, the bank crisis weakened the general public ’ s trust in credit institutions. some strategies followed by certain banks may have made them less customer - centric. i am thinking, for example, of the incentive schemes based, perhaps to excess, on growing business rather than incrementing customer loyalty. in addition, the lack of good practices in the selling of bank products and services has clearly played some part in this loss of trust. one of the most important future challenges we face is to restore and strengthen the industry ’ s reputation both with investors and customers. the first step to achieve this must be to make simplicity and accuracy a priority in all communications with customers. this includes aspects such as improving the language that is used in relations with customers, refining selling policies and promoting transparency. allow me, in conclusion, to expand on these points a little further. first, the use of language. the names and descriptions of bank products must not be misleading as to their return and risk characteristics, nor must they be used as misleading advertising tools. accordingly, terms that offer a false sense of security as to the return or interest that may be obtained must be avoided. the need to improve the use of language is even more pressing, bearing in mind that the dialogue between banks and their customers is not, shall we say, a dialogue between equals. in this respect, since 2008 both the banco de espana and the national securities market commission ( the cnmv ) have made great efforts with a view to improving financial knowledge among the general public through the financial education plan. the initiatives taken in this period, to cite just a couple, include the launch of the finance for all portal ( www. finanzasparatodos. com ) and the project to include financial education in the school syllabus. a second key aspect of this process is to improve selling practices. financial institutions have made advances in the service they offer and the resources they dedicate to the monitoring of regulatory compliance. but greater efforts are needed to ensure that bank customers – banks ’ main assets – are able to understand the terms of the transactions concerned ( clauses of agreements, the cost of services provided, etc. ).