with an unemployment rate close to 24 %. the fact that the average loan - tovalue ratio stands at 62 %, with only 3 % of mortgages with an ltv above 100 %, and the widely rooted wish in spanish society to own one ’ s own house explain why the mortgage portfolio is, in fact, the least risky of all spanish deposit institutions ’ credit portfolios. conclusions i could talk a good deal more about what we have done in spain to tackle and resolve the problems of our banking system. but i believe it would be much more interesting to listen to your concerns and worries and try to allay them. i shall thus conclude that the steps taken by the spanish government and parliament on fiscal consolidation, labour market reform and pensions system reform, along with the changes i have explained to you in relation to savings banks and the strengthening of banking solvency, should – little by little, since confidence takes some time to pick up – afford us greater recognition by international investors. recently, in fact, we have seen how our sovereign spread has been converging more towards the core euro area countries, distancing itself from those economies with bigger challenges outstanding. our firm commitment to transparency, to the rigorous valuation of assets through a clear provisioning system and our significant increase in capital requirements should contribute to fully dispelling doubts about the current situation of spanish banks and their medium - term prospects. thank you for your patience. i am at your entire disposal to respond to your questions. bis central bankers ’ speeches

of activity, and new lending in particular, decreased, and the high profitability of spanish deposit institutions seen so far, began to be eroded. the impact of these developments was uneven, impacting with greater force those banks that had most grown in the expansion and, in particular, a group of savings banks that had concentrated a significant portion of their lending portfolio in financing real estate developers. expectations about house prices, which had started to lose momentum in 2006, changed and prices began to fall, in a much more unfavourable macroeconomic setting and with financial institutions much more cautious about extending credit given the rise in bad debts and provisions, and the tightening of funding conditions. in view of these problems, the government and the bank of spain began to take decisive measures to tackle this “ classic ” crisis based on credit to the real estate market and to the abrupt change in cycle, as well as to the changes in the markets. firstly, to address the uncertainty on funding markets, a programme was set up that would allow banks to issue debt with the backing of the state and the ecb started to inject liquidity allowing full allotment. secondly, the fund for the orderly restructuring of the banking sector ( frob ) was created in 2009. with the frob we anticipated the need to equip bis central bankers ’ speeches ourselves with an instrument to carry out a far - reaching restructuring of the savings bank sector. the scale of the savings bank restructuring process has been huge. of the 45 previously existing savings banks, only 17 remain. the aims of the process were very clear. first, to take advantage of the concentration processes to restructure assets and correct the excessive fragmentation of this sector. second, to reduce the excess capacity in the savings bank sector. the adjustments are between 10 % and 25 % in the number of offices, and between 12 % and 18 % in staff. third, to reinforce the viability of the new institutions ( resulting from the mergers of several savings banks ) with the resources and the management capacity of the savings banks best placed to lead each of the concentration processes. finally, to ensure in the medium term that the lower number of institutions and the diminished capacity will allow a reasonable level of profitability in step with the risks incurred for the remaining institutions. to round off the adjustment, the legislation governing savings banks was also amended in an attempt to make the management of these institutions more professional and, most notably, opening them up to market discipline and to the possibility