Recently, a raft of measures has been approved to help the business sector and the selfemployed, which may prove a useful tool precisely for reducing this risk. In this connection, its swift and consistent implementation is crucial. And the distribution mechanisms must selectively target the assistance on firms that are viable but have solvency problems. Flexibility is also needed in the volume and use of committed funds, so as to adapt to the course the pandemic takes and to the potential materialisation of risks. 5  In parallel, we must promptly identify the structural transformations caused by the pandemic. There may be firms that have ceased to be viable and it would be counterproductive for them to be sustained indefinitely by budgetary policy. For these firms, it would be desirable to make insolvency procedures more flexible. The proper functioning of the flexibility mechanisms available to firms must also be ensured. Their role is crucial for allowing potential structural adjustments derived from the crisis. And, of course, there should be an emphasis on active employment and training policies to smooth the reallocation of workers to sectors with a future. All these actions would help, jointly and complementarily, to prevent the crisis from taking on an additional financial component. The banking sector could thus continue to be part of the solution to the crisis by granting credit to households and firms, and contributing to the recovery of the economy.
This intensification of concerns has raised the  BIS central bankers’ speeches  1  threat of contagion from these countries, and the consequent financial market developments that have affected several other European countries have added to the risk of a spill-over to the largest European banking systems, including our own. So far, the threat has been limited. An important reason for this is that banks have done the right things over the last two years, namely to focus on their resilience by refinancing debt at longer maturities and raising their buffers of capital. It is hard work in an environment that is still affected by the crisis, but there is no doubting that it is the right thing to have done and continue to do. Sound banking is about having a strong capital base and a funding profile in terms of maturity that can withstand the sorts of shocks in the world that will happen from time to time. It is not about expanding your bank rapidly and funding the growth in the overnight money market. This need for adjustment also explains why at the Bank we are sticking firmly to the plan to allow the Special Liquidity Scheme to run-off on time a year from now. Over the last twelve months, banks have taken the necessary steps to move towards that goal.