24  1 November 2017  Collegium generale | Fritz Zurbrügg | © Swiss National Bank  Macroprudential instruments  Revision of selfregulation: minimum amount of own funds and amortisation obligation  Activation of sectoral CCyB at 1% from the end of September 2013  Increase in sectoral CCyB to 2% from the end of June 2014  Further revision of selfregulation: shortened amortisation period  Jul 2012  Feb 2013  Jan 2014  Sep 2015  CCyB = Countercyclical capital buffer 25  1 November 2017  Collegium generale | Fritz Zurbrügg | © Swiss National Bank  Macroprudential instruments Slower momentum on the Swiss mortgage and real estate markets  26  1 November 2017  Collegium generale | Fritz Zurbrügg | © Swiss National Bank  Conclusion  “Debt is a two-edged sword. Used wisely and in moderation, it clearly improves welfare. But, when it is used imprudently and in excess, the result can be disaster.” Cecchetti et al. (2011). 27  1 November 2017  Collegium generale | Fritz Zurbrügg | © Swiss National Bank
These upside risks would be of a lesser magnitude than the downside risks deriving from the potential worsening of the epidemiological situation. I also wish to stress that the assumption contained in the Draft Budget regarding full absorption of the European funds by the Spanish economy and the associated multipliers seems optimistic in the light of historical and empirical evidence. If we analyse the capacity of the Spanish economy to mobilise funds linked to other European programmes, seven years after the last three European structural fund programmes (all with smaller volumes than the NGEU) were introduced, Spain’s rate of absorption of the funds available was below 80% in all cases. In addition, it is important to note that in order for the European funds to have the multiplier effect on aggregate activity that is assumed in the Draft Budget (slightly above 1), these funds will have to be employed in quality projects, that is to say in public investment initiatives with optimal capacity to boost economic growth potential in the medium term, for example, by enhancing technological and human capital stock. Moreover, there must be no negative confidence effects, deriving, for instance, from doubts regarding the sustainability of public finances.5 Hence the pressing need for the medium-term fiscal consolidation programme to which I will refer later and for structural reforms that will boost our potential growth.