Further, like the Federal Reserve and the Bank of England, it has pursued a very expansionary liquidity-provision policy, which can be measured by the sizeable increase of over 50% in its balance sheet since 2008. Among the extraordinary measures, I would highlight the long-term (as long as three years) refinancing operations; the extension of the list of assets accepted as collateral for the loans made to banks; and the launch of asset purchase programmes, such as the Securities Market Programme, the two Covered Bonds Purchase Programmes (including Spain's) and the announcement, in August 2012, of the Outright Monetary Transactions programme. More recently, in July this year, a policy of forward guidance has been adopted, involving the more accurate communication of the projected behaviour of official interest rates in the future. Yet we should remember that the capacity of monetary policy to resolve the problems at the root of this crisis is very limited. What it can do, and is doing, is making time so that other players who do have the proper tools to resolve the problems can adopt the measures needed, and so that such measures may take effect. The other European economic authorities, starting with the Commission, have – in close collaboration with national governments – taken significant steps towards correcting the weaknesses exposed in the euro's institutional arrangements. Thus, a permanent mechanism, the European Stability Mechanism, has been set up, with the capacity to provide funds to the Member States deprived of access to the capital markets.
This is progressing slowly because their income is weak and so the adjustment has to proceed mainly through the contraction of credit. Under these conditions, aggregate credit to the private sector will probably still take some time to achieve positive rates. This situation at aggregate level can and should be compatible with differing behaviours of credit to firms and to households, so as to allow financial resources to flow to those sectors in a solid position to undertake viable spending, investment and hiring projects. The results of preliminary analyses at the Banco de España indicate that such reallocation of financial resources is already taking place. However, there are still some frictions affecting most notably lending to SMEs, which as you know are particularly vulnerable to crises such as that we have witnessed. 4  BIS central bankers’ speeches  Under its remit, the Banco de España has recently adopted specific measures addressing this sector, such as the redefinition of SME for the purposes of prudential regulation or the early application of the supporting factor for capital requirements associated with SME loans. The Banco de España has also identified possible courses of action in other areas. A far-from-exhaustive list would include exploring ways of strengthening the role of the ICO, simplifying the current public framework of financial support to SMEs and, in the longer term, designing mechanisms to capture homogeneous high-quality information on the most significant aspects of SMEs’ business to make it easier for them to access bank credit.