Indeed, as provided for under its Law of Autonomy, in exercising the functions derived from its membership of the European System of Central Banks, the Government may not give instructions to the Banco de España, and the latter may not seek or take them.3 These principles are also applicable to the functions exercised as a banking supervisor within the SSM. Given the dual role of the Banco de España as a national central bank of the Eurosystem and a supervisory authority of the SSM, its independence takes on an extra dimension regarding the necessary guarantee as to the performance of both functions autonomously (which does not mean separately) within a single institution. In this respect, it should be stressed that the governance of the Banco de España is underpinned by an orderly distribution of different powers among the bodies that the Law of Autonomy specifies as the governing bodies of our institution: Governor, Deputy Governor, Governing Council and Executive Commission. Thus, the functions assigned to the Banco de España by law are performed in a balanced way by these bodies, in accordance with the powers set out in Annex 2. These arrangements are based on the presence in these collegiate bodies of a significant percentage of independent Council members (by way of example, six out of ten of the Council members with voting rights on the Governing Council) appointed on the basis of their competence, knowledge and experience in the field of economics, the financial system or law.
That would be in line with international evidence showing the general slowness of these adjustment processes and highlights the need for such a process to be complemented by banks’ active management by means of sale agreements in respect of their portfolios of problem assets. Indeed, in 2017 and this year there have been successive announcements by banks of agreements with asset management companies to reduce the volume of non-productive assets on their balance sheets. This will result in an improvement in the quality of Spanish bank balance sheets and, consequently, in their supply of credit to the economy as a whole. In fact, the evidence available shows that there is a negative correlation between the non-performing loan ratio and credit growth. From another perspective, the swift progress in correcting the high levels of bad debts in Spain and in other euro area countries is crucial for easing the way to finalising the Banking Union project in respect of its remaining pillar, which is none other than the definitive creation of a pan-European, pooled and sufficiently backed deposit guarantee scheme. All the foregoing justifies the special interest we have as economic and supervisory authorities in credit institutions taking the appropriate measures to expedite the ongoing reduction in the volume of impaired assets. One of the most significant initiatives here is the package disclosed by the European Commission in March.