Looking beyond the regulatory viewpoint, the trend towards greater development of the capital markets could be further encouraged if headway is made in creating a Capital 10/11  Markets Union which, together with the culmination of Banking Union, would allow a better allocation of risk within the Economic and Monetary Union. These changes in the structure of financial markets, in conjunction with the emergence of new technologies, clearly represent a challenge for banks, particularly in the current context of low profits among Europe’s banking systems. In any event, at this point in time the ultimate impact of new technologies on the structure of the financial system is highly uncertain, as it will depend on various factors, including the future regulatory treatment of new players. Conclusions To conclude, Spanish credit institutions have improved significantly in terms of their solvency, profitability and asset quality in recent years. Despite this progress, the Spanish banking sector still faces important challenges, challenges which it largely shares with other euro area banking systems. The most significant of these challenges are: (i) stepping up the pace of sales of unproductive assets; (ii) strengthening capital and liabilities suitable for internal recapitalisation; (iii) building the sector's reputation by avoiding the risk of inappropriate conduct; (iv) confronting the challenge of making profits without undue easing of lending standards; and (v) utilising new technologies, which are both a major challenge for the sector and an opportunity for institutions that can harness them.
Nurturing a sophisticated, technologically advanced workforce that is capable of contributing to the competitiveness of our society has to be one of our highest goals and most rewarding objectives. These are achievable ambitions. They would not guarantee that the future will look as good as the recent past, but they will improve the probability it will. The hardest of these are those where the politics are hard. And this is why it’s so important that we work to strengthen the constituency in the United States for good fiscal choices and good trade policy choices. Education is an important part of this. And the work of the Economic and Financial Education Alliance of Puerto Rico can play a valuable part in creating a stronger foundation for future economic growth in Puerto Rico and in the country. Thank you. BIS Review 25/2005  3