A great effort is needed but, as we have so much at stake, it is vital to prevent deviations from these targets from arising and, should they do so, the necessary measures must immediately be implemented to correct them, as the government has undertaken to do. To see this task through, all levels of government must be involved. This begins with the regional governments, who must firmly redress their budgetary positions, in which connection the strict arrangements for the authorisation of indebtedness may prove helpful. Another confidence-building factor would be greater transparency of regional government budgetary information. True, significant headway has recently been made in this area. But, to dispel doubts about the state of regional finances, it would be very important to see the regular publication of figures for the regional governments as a whole and for each particular region, with the same periodicity, degree of detail, lag and accessibility as State figures. The heavy deterioration in the general government deficit in this crisis advises, moreover, adopting measures to achieve a more balanced budgetary performance both in upturns and in recessions. Here, the government announcement to include in the Budgetary Stability Law a rule whereby general government spending may not exceed the medium-term growth rate of the Spanish economy is most positive. This rule would be immediately applicable to central and to local government, but its adoption by the regional governments would also be pursued.
f.  We expect insurers to have effective risk management and governance, including independent risk and internal audit functions; and boards with a majority of independent non-executive directors, for both insurance groups and significant insurance companies within those groups. g. Insurers must disclose their financial position regularly in some detail, based on market prices for assets and liabilities as far as possible. Our regime, however, is not seeking to eliminate all risk (or achieve the stability of the graveyard). Provided insurers match their assets and liabilities, the Solvency II Matching Adjustment insulates them from movements in the market price of assets backing annuity liabilities to which they are not 4  All speeches are available online at www.bankofengland.co.uk/publications/Pages/speeches/default.aspx  4  exposed as buy-and-hold investors. They are also able to bring forward into day-one profits any returns on these assets in excess of what is required to compensate for the risk of credit default and downgrade. That adds up to a powerful incentive to invest in long-term assets yielding good risk-adjusted returns. Since the introduction of Solvency II, UK insurers have responded by diversifying out of government and corporate bonds into direct investments in infrastructure finance, commercial real estate lending and equity release mortgages (Chart 3). The infrastructure investments, for example, include renewable energy, hospitals, student accommodation, social housing and railway rolling stock leasing (Chart 4).