Absorption is not only an issue at country level, linked to the traditional capacity to allocate the EU funds received, mostly by regional public sector entities. In this case, there is an added dimension. It should be taken into account that all countries are going to implement, over similar time frames, projects in specific, highly specialised areas, largely relating to digitalisation and preparing for and mitigating climate change. This could lead to countries (and different levels of government within countries) competing for suppliers with sufficient technological capacity to carry out the projects, and to some capitalisation of the European funds by technology firms outside the EU, which would, in part, limit their positive domestic effects. In this context, coordination between countries and levels of government within each country can give the projects to be implemented greater economic stimulus and coherence, harnessing economies of scale and spillover effects between regions. 6  See I. Kataryniuk, V. Mora-Bajén and J. J. Pérez (2020), EU deepening and sovereign debt spreads: how relevant is the “political space”? Occasional Paper, Banco de España, forthcoming. 7  See P. García-Perea, A. Millaruelo, V. Mora-Bajén and M. Sánchez Carretero (2020), “The 2020 European Semester and the specific recommendations for Spain”, Economic Notes, Economic Bulletin, Banco de España (forthcoming). 7  The second source of uncertainty concerns the schedule for project implementation.
But I am not so naive as to believe that good corporate culture alone is sufficient to ensure proper behaviour amongst all the staff. Good corporate culture and ethics must also be underpinned by the appropriate incentive or compensation system. A compensation system in which bonuses or promotion are determined by short term financial performance is a recipe for disaster. The unfortunate episode of the mis-selling of Payment Protection Insurance (PPI) products in the UK is a clear example. Banks involved in selling those PPI products have, between 2011 and May 2017, reached settlements with millions of affected customers totaling 27 billion pounds, and three of the largest banks involved have been fined by the UK authorities a total of 117 million pounds. There are also many instances in which bad outcomes ensued because the firms had put in place wrongly designed incentive systems to reward staff for new customers or businesses secured. According to a report by Boston Consulting Group, between 2009 and 2016, a total of about $ billion of financial penalties have been levied on banks, which is a clear demonstration of the 4/5  BIS central bankers' speeches  seriousness of misdeeds and misconduct of financial firms. 16. While talking about fines levied against financial firms, there is an interesting argument, by Professor Charles Goodhart of London School of Economics and Political Science, that imposing hefty fines on banks is actually not a good way of dealing with misbehaviour.