need to reinforce the value of impairments by €861 million, around 2. 2 % of the overall amount of exposures assessed. in 2013, banco de portugal ran a new exercise focused on credit portfolio impairment assessment and on the fair value calculation of the participation units held in restructuring funds. it was directed to credit granted by banks to all segments, with the exception of mortgage and consumer credit ( which are assessed by collective impairment models ) and of credit to public sector entities. the credit portfolio assessed amounted to €93 billion, bis central bankers ’ speeches representing 23 % of total assets. as a result of the exercise, it was considered necessary a reinforcement of €1. 1 billion of the value of impairments, approximately 2. 1 % of the overall amount of exposures assessed. in all exercises, the valuation of the credit portfolio was performed by independent external auditing firms ( ernst & young audit & associados – sociedade de revisores oficiais de contas, s. a. and pricewaterhousecoopers & associados – sroc, lda ) without any relation with the inspected institution. moreover, a strict governance structure was defined to monitor the exercises. a steering committee was created, chaired by the banco de portugal and comprising experts appointed by the ec, ecb and imf, by three euro area supervisory authorities ( banco de espana, national bank of belgium, banque de france / acp ) and by banco de portugal. it goes without saying that all these exercises have been subject to close scrutiny by the troika. it is also worth mentioning that the asset quality review of european banks recently announced by the ecb will follow the same type of approach that we have followed in our horizontal inspections. other instruments worth mentioning include : • the adoption of a new, more stringent, non - performing loans ( npl ) ratio, based on international best practice. it is more comprehensive than the concept used previously, as it incorporates the possibility of debtors with payments in arrears continuing to fail to meet their credit commitments. it is in line with the npl definition used by the imf, reinforcing the comparability and transparency of information on credit quality. the new non - performing loans concept is more conservative than the european average ( collateral is not deducted from the npl ratio ). • the adoption of measures to discourage evergreening. in particular, banco de portugal required banks to earmark

plans on how they intend to reach the new capital requirements through market solutions. the adjustment programme foresees a temporary state bank solvency support facility up to eur 12 billion, which may be used if the market - based solutions fail. unquestionably, immediate priority must be given to maintaining adequate liquidity conditions in the banking system and to strengthening the capitalisation of banks. however, in the medium term, it is fundamental to ensure that the domestic savings levels will make the country less dependent on international financial markets, bolstering the resilience of the national financial system and the overall financial stability conditions. to this end, banks are requested to devise by end - june medium - term funding plans consistent with this objective. the plans will be subject to regular quarterly reviews and adjustments in the plans will be requested as needed to ensure their compatibility with the deleveraging objectives. at the same time, the programme foresees the strengthening of the supervisory and regulatory framework of the banking sector, including, inter alia : the adjustment of the legal framework governing the restructuring and resolution of credit institutions ; the reinforcement of the deposit guarantee fund ( fgd ) and of the mutual agricultural credit guarantee fund ( fgcam ) ; and the introduction of amendments in the insolvency code to support effective rescue of viable firms. the coming years will be extremely demanding for the financial institutions but also for the banco de portugal as the regulatory and supervisory authority. however, i am confident that together we will overcome the challenges and ensure the financial stability conditions required for the sounder growth model we all wish for portugal. bis central bankers ’ speeches