We now follow a “fixed rate full allotment” tender procedure and have significantly expanded the maturity of our operations. Banks have been granted access to essentially unlimited liquidity at our policy interest rate at maturities of, initially, up to six months. This is an exceptional mode of operation. In normal times we auction a given amount of central bank credit and let competition between the bidders determine the interest rate. This unusual mode of operation implies that we currently act as a surrogate for the market in terms of both liquidity allocation and price-setting. •  Our second building block is the long list of assets that we take as collateral. This list was already very long before the crisis, but we have extended it even further and now accept an even wider range of securities as collateral. •  The first two building blocks offer unlimited refinancing against a very wide range of collateral. But they can only reach the financial system if they are coupled with the third building block, namely the very large number of counterparties that have always been able to take part in our refinancing operations. Even before the financial crisis, this number was higher than for the other major central banks. Following the changes to our operational framework in October last year, this number rose further. All these non-standard measures have now been supplemented by further exceptional steps that the ECB’s Governing Council decided to take at its last meeting on 7 May.
At the end of this month, it is planned to approve the restructuring plans of the banks in Group 1 (those controlled by the FROB), and those of Group 2 (the other banks which will require State aid) will foreseeably be approved before year-end. The restructuring plans envisage the transfer of assets to the asset management company, which will become operational in December, and the recapitalisation of banks which need it. Each bank will  4  BIS central bankers’ speeches  have a schedule for implementing the measures that it must adopt, and these are expected to be completed in the first quarter of 2013. Conclusions The State Budget for 2013 represents a substantial effort in terms of austerity. The intended fiscal adjustment is certainly very ambitious, given the ongoing recessionary setting for public finances next year. Central government efforts would be insufficient if not accompanied too by the adjustment to which regional and local government have committed. From the macroeconomic standpoint, some data show progress is being made in rebalancing the Spanish economy. The bulk of the correction has already been made by the current account and it is close to balance in 2012 which, foreseeably, will enable it to run a surplus in 2013. Similarly, we can see improvements in the competitiveness of the Spanish economy both with regard to labour cost indicators and productivity. We forecast that in 2014, and measured by unit labour costs, Spain will have recovered practically all of the competitiveness lost between 1998 and 2008.