BIS Review 43/2009  5  Nonetheless, the answer to restoring the flow of credit is neither publicly funded policies to purchase “troubled” (impaired or toxic) assets nor global and indiscriminate bank recapitalisation plans. While these measures have admittedly been adopted in many developed countries, they are not the most suitable measures for maintaining the flow of credit to the private sector, even if they have been of use in those countries that had to bail out systemic financial institutions. That does not mean they should be totally ruled out. But I am convinced they are of no use for resolving the problem of credit restrictions. The credit-boosting measures best suited to the current situation of the Spanish economy are those aimed at improving the risk profile of both consumer and corporate transactions. This effect may be achieved through different means: e.g. loans subsidised by the Official Credit Institute, credit insurance or the deferral of social contributions. These measures, though not immediately effective and needing complementary action, will help gradually restore lending to companies and consumers. A second challenge for the Spanish financial system is its orderly restructuring in the coming years. The soundness of our financial system, whose behaviour in terms of both solvency and profitability has been patently better since the onset of the crisis than in other developed countries, does not preclude the need for restructuring.
Miguel Fernández Ordóñez: Economic forecasts, measures to exit the crisis, and the Spanish financial system Opening address by Mr Miguel Fernández Ordóñez, Governor of the Bank of Spain, of the Cinco Días Series of Conferences, Madrid, 31 March 2009. *  *  *  Thank you very much for calling on me to inaugurate this series of conferences at a time burdened with challenges for economic analysis and economic policy. Given the scope of this conference, I shall address three matters of interest to the media: economic forecasts, the measures needed to exit the crisis and the current situation of the Spanish financial system. Economic forecasting has seen better days. Over the past 20 years, all institutions have been projecting high growth rates for the world economy in view of the benefits arising from increasingly integrated economic systems anchored firmly on free-market principles. Nobody could have conceived systemic market failings on a global scale such as those we are currently witnessing, and which are prompting a spectacular collapse in output and world trade. And right now, in the thick of the crisis, it is still difficult to prepare macroeconomic projections. But it is precisely in these circumstances when we most need such projections which, while they may well contain a large margin of error, are of use to us for assessing the juncture at which economies stand.