While it is understood that investments carry financial risks, it is also well appreciated that preparing for the uncertainties of the future cannot be fully addressed by protecting principal alone. It is likewise accepted that preparing for the future cannot be properly done without an organized approach.
In this regard, strong property rights and a legal system that enforces contracts quickly and fairly are of particular importance. As many of you may recall, we discussed the topic of globalization and financial stability last summer here in Banco de España and safeguarding these two factors were deemed as essential to avoiding pitfalls in financial liberalization. 2.