It is envisaged that more than 90% of the Spanish banking system, measured by volume of assets, will be supervised by the SSM. 6  BIS central bankers’ speeches  Prior to the ECB effectively taking over supervisory responsibilities, a bank asset review and valuation is planned which will give rise to the requirement of a level of capital to be met by all banks subject to the review and, where necessary, to the setting up of additional coverage. It is worth noting that our banks are starting from a very reasonable level, both from the perspective of the accounting classification of their assets, and from that of asset coverage and provisioning, the result of the review conducted last year under the stress tests and of the above-mentioned recapitalisation processes. Recently, banks’ review of refinanced loans has also concluded, a process which contributes to shoring up their position ahead of the forthcoming evaluation of the quality of their assets. Likewise, and once more with a view to reinforcing the solvency of our banking system, the Banco de España has recommended that banks moderate the distribution of dividends during 2013 and that, in any event, the cash dividends paid out should not exceed 25% of attributable consolidated profit. Naturally, all banks are following this recommendation. The solvency position of Spanish banks has clearly improved in 2013. Average core capital in our banking system will stand at around 10.5% as at December 2013, more than 1 pp up on the same figure a year earlier.
Indeed, while in the initial consolidated State budget for 2013 these three items accounted for around 18.2% of GDP, in 2014 they are expected to represent around 18.5% of GDP and close to 55% of total consolidated public spending. The budgetary adjustment will therefore continue to focus on government consumption, for which a real-terms reduction of 2.9% is projected in 2014 for overall general government, based partly on the civil servant wage freeze and on the extension of austerity policies in relation to public-sector employment; and, moreover, on the reduction in public investment. A further expenditure-containing factor will stem from the envisaged revision of pensions, set at 0.25%, in line with the floor established in the draft law defining the sustainability factor. BIS central bankers’ speeches  5  How do these figures compare with those for the euro area as a whole? In terms of GDP, the weight of unemployment benefits continues to stand far above the euro area average, as a result of our high unemployment. Interest payments on debt in Spain are also expected to exceed the euro area average, while spending on pensions would continue to be below the average, given that demographic developments in our country remain more favourable. On the revenue side, a 2.4% increase in total tax receipts (including the share of regional and local government) is forecast, with very few tax changes. These are concentrated in the broadening of corporate income tax bases approved last June.