The quality of mortgage lending is crucial for the quality of our banks’ assets and, ultimately, for their solvency and stability. A deterioration in the quality of mortgage assets would affect the conditions on which financial institutions themselves are funded, since it might lead to a downgrading of mortgage market securities and that, in turn, might ultimately worsen borrowing conditions for households and firms. That said, Spanish banks are better placed today than one or two years ago to cope with the increase in the demand for credit that our economy will see with the recovery in activity and higher growth. This is due to three interrelated factors. First, the improvement in financial markets, in particular in the euro area. The monetary policy measures adopted by the European Central Bank and the reforms to the institutional framework of the euro have made a decisive contribution here. Second, the recovery in the Spanish economy, one component of which has been underpinned by the reforms already pushed through, which are contributing to correcting the imbalances built up during the upswing that ended in 2008. However, and this is the third factor, the favourable developments in the Spanish banking sector cannot be understood without considering the transformation it has undergone.
Second, the legislative amendments must strike an appropriate balance between the rights of creditors and those of debtors, especially the socially excluded, and I should like to highlight the advisability of concentrating efforts in the field of social policies: a country as economically, socially and institutionally developed as Spain has sufficient resources to face up to and resolve the most dramatic and unacceptable situations of exclusion and need without affecting financial stability in the process. All these issues have been duly discussed in this Congress, which is why I shall focus on the situation of our banking system and on our economic outlook. BIS central bankers’ speeches  1  Role and situation of Spanish banks I should first like to highlight the crucial importance of banks in resource allocation and their role of intermediation between those supplying and demanding financing. Mass access to owner-occupied housing would be almost inconceivable without their intermediation. Mortgage lending is a very important segment of the financial intermediation in which credit institutions engage. As at December 2014, mortgage loans for house purchase extended by credit institutions to households amounted to slightly over € billion, more than 40% of total bank lending. The number of outstanding mortgage loans for house purchase is at present 5.8 million, a large percentage of which (82%) are at floating rates, which has allowed for the transmission of the Eurosystem’s more accommodative monetary policy to household financing conditions.