7 See the 2014 report “ERAC peer review of the Spanish research and innovation system”, authorised by the European Commission. 15/18  The growth of firms is influenced by the availability of external financing to undertake new investment projects. In Spain’s case, as is known, this financing is mainly through bank loans, especially at smaller-sized companies. In the immediate run-up to the crisis, the standards governing this type of loan to firms were relatively lax. That made for abundant bank financing, which was particularly conducive to the creation and survival of numerous firms, many of them small in size. However, the companies resorting in best conditions to such lending did not always evidence high productivity. Indeed, the buoyancy of loans extended to relatively unproductive firms in the years prior to the crisis made for the build-up of macrofinancial imbalances. Conversely, in recent years, the allocation of lending appears to be proving more efficient. Specifically, funds tend to be earmarked for companies showing a comparatively more favourable economic and financial situation and that are more productive.8 This change in lending standards might be linked both to experience of the crisis and to financial regulation changes. In particular, the regulatory requirements applied to credit institutions have been significantly tightened with the aim, among others, of better aligning the level and quality of bank capital to the real risks assumed by banks. The weight of construction-related investment has diminished, partly as a result of the credit-allocation changes I have just referred to.
07.05.2019  Challenges for the Spanish economy. Productivity and the business sector Assembly of the Instituto de la Empresa Familiar Pablo Hernández de Cos Governor  Good morning. Let me begin by thanking the Instituto de la Empresa Familiar (IEF) for their kind invitation to take part in their Annual Assembly. Throughout its 25-year history, the IEF has not only played a crucial role in disseminating studies on the reality of and the challenges facing family businesses in our country, but has also fostered debate on many economic aspects of general interest. One recent example is its interesting publication on dual training on its website.1 In my address today I shall, after briefly describing the current economic setting, mainly analyse the principal challenges facing our economy in the medium and long term. I will particularly focus on productivity, the main determinant of economic growth in the long run. In Spain’s case, productivity dynamics have been particularly poor in recent decades. Improving them with a view to the future is, therefore, a prerequisite for achieving sustainable and balanced growth in the long term. The economic situation  After averaging growth of around 3% in the three years from 2015 to 2017, the pace of the Spanish economy eased somewhat last year to annual growth of 2.6%. 1  See the study by Instituto de Empresa Familiar (2018) “Orientación profesional y formación dual. Hacia un modelo integrado para el empleo juvenil”.