committed to the successful implementation of sepa by the irish banking community. the irish payment services organisation, ipso, is the body with primary responsibility for ensuring the implementation of sepa. in this context i would like to take the opportunity afforded by this evening ’ s event to acknowledge publicly the efforts of pat mcloughlin, the chief executive of ipso ( and of his predecessor in this role, stewart mackinnon, now leading the sepa initiative at the european level as the secretary general of the european payments council ), the members of the ipso sepa implementation task force, and indeed all of their colleagues at every level in the ipso member banks, in preparing the irish banking community to meet the challenges posed by sepa ; in a few minutes, pat will speak about sepa from his own perspective. national payments implementation programme in fact, sepa is but one of a number of important developments currently in progress in the area of payments. a closely related project is the national payments implementation programme, or npip, an initiative involving the central bank, the department of the taoiseach, the department of finance, and ipso. the aim of npip is to develop a strategy for the future payments infrastructure in ireland that will be inclusive of, and deliver efficiencies to, all sectors of the economy. the active involvement of all of these constituencies is indicative of the importance being attached to developing ireland ’ s payments infrastructure. in addition, many other groups – representing, for example, consumers, the business community, and the wider public service – have already become involved in npip, and it is intended that others will be encouraged to participate as and when the need arises during the course of the project. there is significant common ground between npip and sepa, with the focus in each case being very much on electronic payments. the successful implementation of both npip and sepa will require the delivery of electronic payment methods that are : • safe and efficient ; • easy to use ; • accessible to everyone. other significant changes are also occurring throughout europe in the arena of payment and settlement systems. the target system is in the course of being replaced by target2, which provides harmonised prices and services, together with improved efficiency and additional functionality. target2 commenced operations in november last and ireland will be in the second group of countries to migrate to the new system in february. finally, target2 securities, or t2s, will harmonise the settlement of securities

they manage risk adequately and hold sufficient levels of capital, provisions, and liquidity to absorb potential losses and respond to changes in the composition and duration of depositors ’ desired asset portfolios. mexico ’ s banking system has performed these activities satisfactorily in recent years, and it fared notably well during the global financial crisis. in particular, the economic downturn of 2009 resulted in a contraction of lending, some deterioration of the quality of the loan portfolio, and additional provisioning needs. yet past - due loan ratios stayed relatively low, perhaps with the exception of that of consumer loans. more importantly, banks remained profitable and well capitalized during the crisis and at all times exhibited adequate levels of liquidly and ample access to funding sources, which, by and large, are based on fairly stable retail deposits. bis central bankers ’ speeches as economic recovery has taken hold, lending activity has resumed and the quality of the loan portfolio has improved. bank solvency indicators remain strong, as reflected by capitalization levels, the significant proportion of tier - 1 capital within net capital, and high ratios of loan - loss reserves to past - due loans. 1 the strong position of the banking system has been the result of improvements to the regulatory and supervisory framework, including stricter capital requirements and rules for provisioning of reserves based on expected rather than realized losses. it is also a consequence of lessons derived from experience. in particular, the financial crisis of 1995 dramatically revealed the need for banks to maintain appropriate levels of high - quality capital potentially able to absorb losses on an ongoing basis. it also taught the importance of welldeveloped and liquid financial markets in which economic agents can hedge and diversify their risks. the reforms put in place during the last few years have helped mexico fortify its financial system, revamp its supervisory practices, and develop its financial markets. the attainment of low inflation has allowed the emergence of long - term contracts, which include longer tenors for public and private debt in pesos at fixed nominal interest rates. hence, in marked contrast to the widespread practice in mexico prior to 1995 and in the united states before 2008, mortgage products are mostly based on fixed nominal interest rates and do not allow for negative amortization. in addition, since banks enjoy highly profitable domestic opportunities in traditional lending, they were not attracted to taking exposures to the derivative instruments that became the amplifying vehicles of instability in the recent great financial crisis. the soundness of mexico ’ s banking system