Such weaknesses arose from the rapid growth in credit, the high exposure to the real estate development sector and the increase in capacity, which grew so as to adapt to what were unsustainable rates of expansion. The global crisis broke at a time when the adjustment of the imbalances had just begun, and it contributed to exacerbating their significance. The measures adopted in the Spanish banking sector have been specifically aimed at countering the weaknesses incubated during the expansionary phase. Undoubtedly, the key challenge has been the restructuring of savings banks, undertaken with the support of the Fund for the Orderly Restructuring of the Banking Sector (FROB). The 45 pre-existing savings banks have since seen their number reduced by two-thirds, in a consolidation process that has affected 95% of the sector’s total assets. This has enabled excess capacity in both networks and central services to be cut; it corrects the excessive fragmentation of the sector, which hitherto comprised a large number of institutions whose small size curtailed future prospects; and it allows advantage to be taken of the resources and management capacity of those savings banks which, on the basis of their greater soundness, have led the various integration processes. Other far-reaching measures have been brought to bear in this restructuring process. For instance, there is the reform of the savings bank regulatory framework, which is allowing for their conversion into institutions more subject to market discipline and better prepared to meet the requirements of the new international regulatory framework.
It has been a pleasure and a privilege for me to cooperate with him as a member of the ECB Governing Council over the past five years, during times of great complexity for monetary policy and financial stability in the euro area. In this period I have seen at first hand Jean-Claude’s personal and professional qualities. He has shown he has the right blend of firmness and pragmatism required to take difficult decisions at the worst junctures of the crisis. And he also possesses the leadership and communication skills needed to convey a long-term vision of the European project and the central role that the ECB plays here. During Jean-Claude Trichet’s presidency, the ECB Governing Council has displayed the resolve needed to deploy all the instruments available to the common monetary policy and to take timely decisions that help ensure the goal of price stability in the medium term is achieved. Since the creation of the ECB, average inflation has stood just below 2% and inflation expectations have held stable. The extraordinary scale of the financial crisis has put to the test the responsiveness of the Eurosystem in general, and of Jean-Claude Trichet in particular. Since the start of the crisis a series of bold and well-directed decisions have been adopted. And these have contributed notably to restoring the monetary policy transmission mechanism, which had been seriously damaged, and to preventing an unprecedented collapse of the financial system with incalculable consequences.