The third flaw in our financial system was the inappropriate corporate regime governing the savings banks, which came to account for almost half the Spanish banking sector. If the crisis has shown us anything it is that, despite the good management performance at numerous savings banks, the former ownership regime of those institutions and, in some cases, their reliance on political power, created risks that hindered their proper management. The successive reform measures taken, and in particular the legislation on savings banks and bank foundations enacted last year, are a key qualitative change, requiring that former savings banks over a certain size be transformed into (ordinary or bank) foundations and that those which maintained  BIS central bankers’ speeches  3  a significant shareholding in a bank have sufficient incentive to waive control of the bank and meet, in any event, certain conditions to ensure they are professionally and independently managed. I take this opportunity to confirm that in the next few days the Banco de España will be issuing, for public consultation, a draft circular which implements the abovementioned legislation and sets out in detail some of the requirements that the bank foundations will have to satisfy. 4. The fourth and last main flaw in the Spanish banking system was its surplus capacity, as a result of the tremendous growth in loan demand during Spain’s long period of economic expansion.
Notes: The figure shows by how much the term premium component of euro area sovereign yields (weighted average of Germany, France, Italy and Spain) with maturities of one to ten years is estimated to be compressed due to the APP through the duration channel at three dates: the announcement of the APP (Jan 2015), the extension of the programme in June 2018, and the announcement of the restart of net purchases in September 2019. Chart 9 APP impact on ten-year euro area sovereign yield over time (basis points)  Sources: ECB, based on Eser et al. (2019). Notes: Evolution of the APP impact on the ten-year synthetic sovereign yield (weighted average of Germany, France, Italy, Spain). The impact is derived on the basis of an arbitrage-free affine model of the term structure with a quantity factor (see Eser et al. 2019). Latest observation: September 2019. The first point is January 2015 when the ECB had just announced that it would start purchases in the following March at a rate of € billion per month, intended to run until September of the following year. According to ECB staff estimates, the anticipation of the purchases, the associated balance sheet accumulation of the ECB and, as a flip side of the coin, the expected duration extraction were associated with a term premium compression of almost 50 basis points for the ten-year maturity. For shorter-term bonds the effects are lower, such that the expectation of asset purchases is estimated to have led to a flattening of the curve.