We are well aware that crises that incorporate a significant financial downturn are usually deeper and longerlasting. The health crisis will directly affect the profitability of the European banking sector. Such profitability was already low before the crisis broke, and events have highlighted the need to tackle even more urgently certain challenges, such as those associated with digitalisation, the management of cybersecurity risks, reputational risks and those relating to climate change. This underscores the importance of making further headway in improving banking efficiency. Given the extraordinarily prevalent role played by this sector in the Spanish and European economy, how successfully these challenges are resolved will notably influence the intensity and sustainability of economic growth in the coming years. The importance of an extension and selective adaptation of national stimulus measures In the national economic policy arena, achieving the dual aim of supporting the recovery and smoothing the adjustment of the economy to the post-pandemic scenario calls for two actions. First, the authorities must extend and regularly recalibrate some of the 6  measures already applied, which will have to be more closely focused now on the groups of firms, sectors and individuals most affected. And further, their design should enable the structural adjustments needed ahead of the new post-pandemic environment to be brought about. Allow me to illustrate this idea in relation to two measures that have been particularly important in recent months: the policies on guarantees and on ERTEs.
Ekholm, K, Moxnes, A. and Ulltveit-Moe, K. H. (2008), “Manufacturing Restructuring and the Role of Real Exchange Rate Shocks”, CEPR Discussion Paper No. 6904. European Central Bank (2002), Monthly Bulletin, June 2002. Gourinchas, P.-O. and Rey, H. (2007), “International Financial Adjustment”, Journal of Political Economy 115, 665–703. Hansson, B. and Lindberg, H. (1994), “Monetary Conditions Index – a Monetary Policy Indicator”, Economic Review 1994:3, 13–19. Krugman, P. (1989), Exchange Rate Instability, MIT Press, Cambridge. Lagervall, B. and Nessén M. (2009), “The long-term development of the krona”, Economic commentaries no. 6, Sveriges Riksbank. Lothian, J. R. and Wu, L. (2011), “Uncovered Interest Rate Parity over the Past Two Centuries”, Journal of International Money and Finance 30, 448–473. BIS central bankers’ speeches  11  Marazzi, M., Sheets, N. Vigfusson, R., Faust, J., Gagnon, J., Marquez, J., Martin, R., Reeve, T. and Rogers, J. (2005), “Exchange Rate Pass-through to U.S. Import Prices: Some New Evidence,” International Finance Discussion Paper 833, Board of Governors of the Federal Reserve System. Mark, N. C. (1995), “Exchange Rates and Fundamentals: Evidence on Long-Horizon Predictability”, American Economic Review 85, 201–218. Meese, R. A. and Rogoff, K. (1983), “Empirical Exchange Rate Models of the Seventies: Do They Fit Out of Sample?”, Journal of International Economics 14, 3–24. Sellin, P. (2007), “Using a New Open Economy Macroeconomics Model to Make Real Nominal Exchange Rate Forecasts”, Working Paper No. 213, Sveriges Riksbank. Stevens, G. R. (1998), “Pitfalls in the Use of Monetary Conditions Indexes”, Reserve Bank of Australia Bulletin August 1998, 34–43. Svensson, L. E. O.