With a common monetary policy and (micro)supervisory policies, and a fiscal policy with almost no room for manoeuvre, the macroprudential policy becomes a much-needed ‘degree of freedom’ to deal with the lending cycle, a task that traditionally has been allocated to central banks too. As the recent article IV visit of the IMF made clear, Spain is one of the few countries in Europe still not to have a macroprudential authority. Given the role that macroprudential policy will play in the future, it is probably high time that we all reflect on the optimal design of this authority in order to enhance financial stability. 2  See J. Saurina and C. Trucharte: “The countercyclical provisions of the Banco de España 2000-2016”. Banco de España, 2017, for an account of dynamic provisions in Spain, why they were introduced, their impact and lessons drawn for prudential policy. 3  See G. Jiménez, S. Ongena, J.L. Peydró and J. Saurina: “Macroprudential Policy, Countercyclical Bank Capital Buffers, and Credit Supply: Evidence from the Spanish Dynamic Provisioning Experiments”, Journal of Political Economy, 2017, for a thorough quantitative analysis of the countercyclical impact of dynamic provisions in Spain. For a broader discussion of the interaction of dynamic provisions with monetary, fiscal and regulatory policy, see A. Estrada and J. Saurina “Spanish BoomBust and Macroprudential Policy”, Financial Stability Review, Banco de España, May, 2016. 6/7  Let me conclude by stressing the relevance of the conference, given the importance of the correct measurement of credit risk.
In this regard, the correct calculation of provisions plays a crucial role in the way banks manage appropriately their credit risk. A consistent level of provisions according to the risk profile of each bank will prevent any undesired impact on solvency levels, which would be the final resource to absorb any loss arising from the ordinary activity of banks that has not been eliminated before by the correct application of provisions. In addition, appropriate macroprudential tools in the hands of policy-makers might help reduce the volatility of credit and business cycles. Allow me to express once again my gratitude to the co-organisers of the event for their excellent work, and to wish all the participants a fruitful conference and a pleasant stay in Madrid. We are all looking forward to hearing from the experts on the different challenges that the new provisioning paradigm entails, so without further ado I give the floor to Fernando Restoy, Chair of the Financial Stability Institute (FSI), to start with the first panel. 7/7