It is also essential to maintain the criterion of demanding conditionality when designing public assistance, so that this is only received by institutions that adjust their capacity and manage to improve their efficiency, which is easier to do when their size is increased. At the same time, any strategy that encourages banks to seek private solutions requires more time than one of wholesale public intervention. But this system of incentives, which has required an enormous amount of work not only by the supervisory authorities at the Banco de España but also by many savings bank managers, has meant that most institutions have voluntarily undertaken integration and restructuring process. That has not only served to reduce the contribution of the Spanish taxpayer, but also to increase banks’ size and reduce their capacity, thus giving rise to a banking system that is somewhat better prepared to withstand  6  BIS central bankers’ speeches  the crisis than the one we had when it started, although all the institutions still have much to do in the way of improving their efficiency. It is also important to emphasise that the key to every restructuring is to clean up balance sheets. Some of the criticisms that you may have heard during the savings bank restructuring process have been that it was unfair to require savings banks first to write down their assets and then to recapitalise too.
The assessment of different alternatives for appropriate remuneration schemes, on the basis of correct incentives and horizons, constitutes the right starting point from which to explore how excesses or bad alignments may have contributed to accelerate or amplify disorders within the financial system. As you have seen, we are not lacking ideas on how to reduce procyclicality. Rather, our main problem is to select what are the best tools to include in our toolbox. In this sense, I am sure that your contributions in this seminar will be extremely useful for this purpose. Now, let me give the floor to Mr. Josef Tošovský, with whom I have the honor to chair this opening session and to whom I personally thank his presence in this conference. BIS Review 552009  3