And it has also enabled the growing incorporation of the population (particularly the female population) into the labour market to be compatible with further cuts in the unemployment rate, which stood at 8.5% on average in 2006, the lowest level since the late 1970s and practically on a par with the euro area average rate. The behaviour of employment denotes changes of some depth in the Spanish labour market, such as the marked fall in the structural unemployment rate, which may be interpreted as an increase in the scope available for generating employment without wage pressures arising. The counterpart to an employment-intensive growth pattern has been modest increases in actual productivity. It is difficult to offer an accurate diagnosis of the reasons for this, given the difficulties of measuring and estimating productivity in the presence of significant structural changes, such as the composition effects arising from the concentration of growth in sectors that are relatively less dynamic productivity-wise. But what are possibly being reflected here are shortcomings in the quality of factors of production and in the characteristics of the business sector. BIS Review 67/2007  3  That said, the responsiveness of supply is not proving sufficient to counter the pressure of expenditure on price formation. On one hand, compensation per employee quickened somewhat in 2006, but to a lesser extent than did wage settlements, as a result of the changes in composition and the factors boosting labour market flexibility that I referred to earlier.
It should also be acknowledged that the build-up over time of new European financial regulations, even though they have been beneficial to European financial intermediaries and institutions, has posed an organisational challenge to institutions. It is thus not surprising that they have called on Brussels to contain the rate at which new regulations are promulgated. All European regulators and supervisors, including the European Commission, agree on the need for the thoroughgoing implementation of approved regulations. But we also agree on the advisability of avoiding new regulations in the coming years. The Banco de España has sought, as far as possible, to limit the attendant costs, whether through unifying accounting criteria for reporting to the market, for prudential purposes and for calculating tax bases, through the convergence of our criteria with those demanded by other supervisors, such as the so-called national discretion clauses in Basel II, or through our circulars, i.e. specific regulations that provide institutions with the necessary legal certainty. But new financial regulations cannot be dispensed with indefinitely, since it is quite possible that the very dynamics of European market integration will entail the need for new regulations in specific fields. Indeed, new reforms may even prove appropriate for Spanish institutions. For example, the fragmentation of deposit guarantee arrangements in Europe, in terms of financing, structure and organisation, might warrant a new Directive, which in turn would level the playing field, given the greater rigour of the Spanish system.