In that case, as in any other business, but all the more so in an industry as competitive as Spanish banking is, it would be of paramount importance to have flexible cost structures capable of adapting to new scenarios. Indeed, once the property market has moved onto a more moderate path, institutions will not only be confronted with a volume challenge, but also one of type of business. Specifically, they will progressively have to limit the importance accounted for by the property sector in their lending portfolios in recent years, moving towards other activities. In the design of these strategies it is to be hoped that easy, short-termist decisions, but which have highly negative potential in the medium term, will not be adopted. Entities should not succumb to the temptation of offsetting the slowdown in demand with a decline in credit quality standards. Recently, some concern was detected in this connection in the US mortgage market, especially in relation to subprime lending to the least creditworthy segments of the population. Such lending in the United States is usually to borrowers with a poor credit history or with little documentation of income that makes it difficult to properly assess their creditworthiness. In Spain, if we identified as subprime those operations with individuals who at some point in the past have failed to meet their credit obligations, the amounts extended to such individuals would stand at around 1.27% of the overall mortgage funds lent, compared with levels for the US subprime market of around 14% of mortgage loans.
I should not wish to conclude this address without highlighting the need to further efforts in the financial education of consumers. In early 2007 the Banco de España released a new version of the Bank Customer Portal, but much remains to be done. The growing complexity and sophistication of the international financial system is, as I mentioned, creating a “knowledge gap” between financial institutions and final investors. And far from closing, the gap is widening. Supervisors, along with the other authorities involved in safeguarding consumer rights, must step up and, above all, combine their efforts in this field, since bank customers with a sound financial grounding are a vital pillar in a sound, competitive and stable financial system. It remains only for me to express my thanks, which it is a pleasure to do. During these first 11 months of my term of office I have had the good fortune to work closely with this Governing Council, the Executive Commission, the Deputy Governor and the Directors General, and to have received the firm support of the Bank’s staff. I thank you all and, after having celebrated the 150th anniversary of the adoption of the name Banco de España, I can bear witness to the fact this institution is performing increasingly better the tasks entrusted to it. BIS Review 67/2007  9