is one of the most highly cited young macroeconomists in academia, and his research interests comprise macroeconomics, labour economics, and international finance. his latest research has focused on topics such as the global decline in labour's share of income, productivity and capital flows in southern europe, and the effects of unemployment insurance policy on macroeconomic outcomes. as a macroeconomist whose work is grounded in thorough analysis, and a profound knowledge of models and data, he also takes into account the policy implications of the findings of his research. this is an important factor as he is a pioneer who has done groundbreaking work, and his research frequently encourages others. in this respect his work on the global decline in labour ’ s share of income has prompted a number of papers from academia and different institutions so as to understand this change over time and its implications for income distribution and productivity. similarly, his work on capital allocation and productivity in southern europe has been widely influential. mr. karabarbounis, congratulations on my behalf and on that of the banco de espana.

s capital is amortised. bis central bankers ’ speeches the path pursued by the sector as a whole – to contain financial and operating expenses while combining diversification with the harnessing of competitive advantages and moderating dividend pay - outs and remuneration – is an appropriate one for adjusting to the new competitive, regulatory and supervisory environment within the framework of the ssm. turning to what are essentially institutional matters, several challenges remain. i would like to indicate three of these. first, to conclude the reform of the spanish banking sector, it is necessary to complete the adaptation of savings banks to the new arrangements stipulated in law 26 / 2013 of 27 december 2013 on savings banks and bank foundations. this law is a fundamental step for ensuring that all credit institutions are managed independently and professionally so that the governance problems which contributed to destabilising part of our financial system are diffused once and for all. in practical terms, this year should see the completion of the transformation of virtually all of the savings banks – those still existing as such – into ordinary foundations or bank foundations. for this purpose, and as it is legally conferred to do, the banco de espana is drafting a circular. this circular will regulate the core aspects of the functioning of bank foundations in order to safeguard the healthy and prudent exercise of the dividend and voting rights corresponding to them as the shareholders of credit institutions, thereby ensuring the professional management of such credit institutions. the circular will specify aspects such as : ( i ) the content of the protocol governing bank foundations ’ management of their ownership interest in the credit institution ; ( ii ) the financial plan, which will envisage how they must meet the possible capital needs of the institution in which they have an ownership interest ; and ( iii ) the requirements which the reserve fund must fulfil as regards its funding, target volume and possible uses ; all the foregoing in cases where, given the percentage of ownership they hold in the credit institutions, these requirements must be met. similarly, the circular will determine the circumstances in which bank foundations will be compelled to diversify their investments and, if appropriate, to relinquish control of the credit institutions which they own through the corresponding divestment. i trust that the period for public consultation of the circular will open shortly. second, the new european framework of resolution is already prompting, in most national jurisdictions, reflection on the institutional architecture of bank resolution. in the past, resolution agreements have required close collaboration between the various authorities