By then, the financial conditions for households and firms had normalised to a significant extent, our economy had resumed a growth rate above 3%, significant increases in employment were posted, the recapitalisation and restructuring of our credit institutions ceased to exert any further significant impact on the increase in the deficit and public debt, and the Single Supervisory Mechanism – incorporated into the ECB – commenced operating. The Report, in which several directorates general of the Bank participated and which was coordinated by the council member Fernando Eguidazu, covers the span of the crisis in the macroeconomic, financial, regulatory and supervisory areas, including national and European reforms. I shall address, first, the aims behind the drafting of the Report; second, the macroeconomic environment in which the crisis unfolded, with the build-up of strong imbalances linked to private-sector debt; third, the restructuring and recapitalisation strategy for a series of credit institutions, essentially savings banks; and, finally, I shall take stock of this process, as far as we can currently consider it. The aim of the Report Firstly, I would like to set out our aims in drafting the Report. On 21 February, the Executive Commission of the Banco de España adopted the resolution to prepare, and I quote, “a detailed report on the financial and banking crisis that broke in Spain as from 2008, addressing its causes, unfolding and resolution, with particular attention to the Bank’s conduct in the crisis”.
Depending on the development of the political situation, the global economy may thus recover at a faster or slower pace than we anticipated, and the exchange rates might be subject to major fluctuations. In this case, the National Bank would have to review its monetary policy. In the short run, the price of oil will also have a considerable influence on inflation. If it continues to erode, measured inflation might fall below zero for a few months. Should this situation arise, it is important to bear in mind that it cannot be equated with sustained - and thus economically dangerous - deflation. On the contrary, a low oil price level would create a positive supply shock and, under the current circumstances, would impact favourably on production. Inflation would be dampened temporarily. We also keep a close watch on the development of the money supply M3 in order to assess the medium-term inflationary risks. Following a phase of low, or even negative, growth rates, M3 is now expanding at a somewhat faster pace. So far, however, there has been no excess supply of liquidity in the economy, and the money stock M3, therefore, does not point towards inflationary risks at present. Finally, I would like to make some closing remarks about the imminent introduction of euro notes and coins. For about three years now, the euro has existed as deposit money. It has led to fixed exchange rates and a uniform interest rate level in the euro area countries.