Admittedly, since the publication of our latest projections more details have become known on the use that could be made of the NGEU programme in Spain in the short term (many of which are included in the Draft Budget we are addressing here today). But notable uncertainty persists over the ultimate level of actual execution of this programme in Spain, and over the capacity of the potential projects finally selected and implemented to increase the Spanish economy’s growth potential. I shall refer again to this matter when discussing the macroeconomic forecasts of the Draft Budget. But first, allow me to mention one final factor which, undoubtedly, has critically influenced recent Spanish and global dynamics. It is a factor that will continue to play a key role in the coming quarters and years in managing and overcoming this crisis. I refer here to the economic policy response. To date, the measures taken by economic policymakers (in the fiscal, monetary, labour market and financial areas) in response to the outbreak of the pandemic have most significantly mitigated its impact. They have eased the downturn in real activity and in economic agents’ income and liquidity, and they have headed off the materialisation of systemic risks to the functioning of the financial markets and banks’ financial stability. From the outset of the health crisis, fiscal policy, both in Spain and in most developed countries, has reacted resolutely.
•  Second, maintaining price stability does not guarantee financial stability. In the euro area, the inflation mandate has always been fulfilled, but has not prevented the emergence of crises in the region. These crises have forced central banks to broaden their mandates to include financial stability in order to ensure the functioning of the monetary policy transmission channel as well as to guarantee the smooth financing of the economy. Stable inflation and financial stability are therefore two objectives that monetary and macroprudential policies respectively seek to achieve. •  Third, the Lehman episode and the euro area crisis have confirmed that financial crises do not stop at borders. Consequently, financial system regulation must be the fruit of international cooperation. These lessons, in the post-crisis world, are at the heart of policy-makers’ actions. Financial crises have led us to renew our approach to financial system regulation, and notably to supplement it with a macroprudential perspective. But what is a macroprudential policy? How can we define clear objectives? What are the policy instruments? How can we organise it? What imbalances need to be redressed? These are only some of the numerous issues that contributors address in this Review. In particular, the broad scope of policy action is a major challenge. We especially need to anticipate all possible conflicts with other economic policies, such as microprudential, monetary or fiscal policy. I will now identify at least two prerequisites to ensure that macroprudential policy is effective: First, if conflicts arise between macroprudential policy should prevail.