to the availability of financing for small and medium - sized enterprises ( smes ) in the new banking universe which will emerge following all these regulatory changes. i am not thinking of the credit problems of smes in the short term due to higher risk aversion or to their weakness during the crisis. these problems have been covered extensively in previous addresses and the measures being taken to alleviate them include exceptional and, naturally, temporary programmes such as those of the official credit institute. here i am not referring to the short term. my concern is that, although it is positive that all the regulatory changes under way seek to ensure that banks will never again cause the serious problems which arose in many countries and ultimately spread to all of them, it should also be realised that those new post - crisis banks will, by definition, be less willing to lend money for business projects with a certain level of risk. clearly, you can ’ t remove the punchbowl and expect the party to swing. the purpose of the calibration exercises undertaken is to avoid excessive requirements that stifle the economy. but nothing will prevent the post - crisis banks arising from the new regulatory regime from being much more prudent and focused on traditional intermediation than in the recent past. it will be possible to temper those requirements involving an excessive cost / benefit burden, but it is doubtful that a change enjoying such wide support will be stopped. the fact is that public opinion in the major countries wants the new international regulatory environment to oblige financial institutions to behave as conservatively as necessary to avoid a repeat of the current crisis. if we take this new scenario as given, we then have to look at how, under those new conditions, entrepreneurs can get sufficient financing to see their projects through. this challenge is even more crucial in countries like spain, where bank financing has much more weight than the alternative sources provided by the stock market, today only accessible to a small number of large companies. our efforts are now concentrated on how to exit the crisis and on avoiding a repeat experience, but we should also be thinking of how to stimulate economic growth under the new regulatory framework. the global agenda of structural reform should include this challenge of how to encourage high - risk business financing by banks which will inevitably be much more risk - averse than in the past and will find it difficult to hold large sums of risky investments on their balance sheets. hence the new financial system which emerges from the crisis should also offer alternative non - bank financing to

improve fairness and effectiveness, targeted interventions by the authorities will also be part of the review ’ s toolkit. where might the solutions lie? the scope of our consultation is potentially huge. so i want to say a few words about how we will give focus to our work, and to give a sense of the questions we are asking in our consultation document. the framework we will be using is shown in figure 3. it divides up areas where the fairness and effectiveness of ficc markets may be deficient into six categories. three of these relate to the structure of those markets : so - called market microstructure ; competition and market discipline ; and benchmarks. and three relate to conduct : standards of market practice ; firmlevel responsibilities, governance and incentives ; and surveillance and penalties. let me say a little more about each in turn. 1. microstructure the first category relates to the microstructure of ficc markets – covering such things as the arrangements for trading, price transparency, market access and the range of asset types. as i noted earlier, many of the products in these markets are tailored to the specific needs of individual borrowers or investors. although that may be good news for them, it does bis central bankers ’ speeches mean that quite a number of ficc markets are relatively thin and lack widespread transparency and are hence intrinsically more vulnerable to manipulation. so there may be a tradeoff between the benefits of customisation, and the costs in terms of weaker liquidity and potentially greater vulnerability to abuse. regulatory and technological change is already leading to greater standardisation and transparency across many ficc markets. in the consultation document, we ask whether that process should go further, whether through industry - led standardisation, removing barriers to entry for new electronic trading platforms or utilities, or further transparency enhancements to practices such as new issue allocation. or could imposing standardisation or transparency standards in excess of those already in place harm, rather than enhance, market functioning and risk transfer? do practices such as ‘ internalisation ’ – where banks match off client orders internally – pose any challenges? 2. competition and market discipline the second structural category is competition and market discipline. concentration in some ficc markets is relatively high both amongst intermediaries and amongst the major asset managers, and has risen further since the financial crisis. for example, the top six dealers account for over 60 % of the uk interdealer fx market. in some cases, firms have also engaged in horizontal