Financial stability

The financial system performs a vital role as intermediary between savings and investment and in the distribution of resources among its applicants. Its proper functioning involves an efficient channelling of these resources and promotes economic growth that is sustained over time. This "greased" system, in which each agent fulfils his mission with a high level of efficiency, is the key to financial stability.

Financial stability requires the proper functioning of a number of elements, like the development of an appropriate international framework, which includes the central banks' monetary policy and the application of stable macroeconomic policies, the existence of efficient payment systems, transparent markets that transmit confidence to agents, responsible financial institutions and the active involvement of consumers of financial products and services.

In accordance with Law 13/1994, one of Banco de España's responsibilities is promoting financial stability. To do so, the Bank of Spain acts in the following areas:

• Analysis and monitoring of the risks that may affect the Spanish financial system and, in particular, the banking sector.
• Regulation and supervision of credit institutions to ensure their solvency.
• Collaboration with other national authorities with responsibilities in these matters.
• Participation in international organisations with competence in these matters.