felt that it would be appropriate to consider their revised principles as well from our prudential perspective. second, in light of the recent high - profile corporate governance breakdowns that i highlighted at the beginning of my remarks, we felt that it was important to consider whether there were any lessons to be learned that would apply specifically to our guidance for banks. finally, the committee has asked the working group to consider whether it would be appropriate to develop guidance on what i call “ know your structure ” elements. while it is too soon to report on the working group ’ s findings, they are expected to make recommendations to the basel committee this summer. we hope to issue a draft of revised guidance on corporate governance for public consultation in late summer or early fall. the ifsb has already expressed an interest in this work, and i certainly encourage everyone here to review the draft guidance when it is released and to send us your comments. we would like the guidance to be relevant not only to basel committee member countries, but to non - member countries as well. we would therefore value your feedback. as we take our work forward in the basel committee, and as the ifsb conducts its own work in preparing its exposure draft, i believe we would all benefit from keeping a sense of proportion. clearly, we cannot have the same expectations for the governance of a large, complex bank that we have for a much smaller bank. when the basel committee issues supervisory guidance, we typically say that supervisors ’ expectations should be commensurate with the size, complexity and risk profile of the institution. that applies equally here. my hope is that we can raise the bar for the governance of the banking industry as a whole, while concentrating our supervisory resources on the governance of the most complex and sophisticated institutions. conclusion i realise that i am all that stands between you and a marvellous gala dinner, so i will keep my closing remarks very brief. i would just like to emphasise that sound corporate governance should be considered a key element of a bank ’ s ability to understand and manage its risks. as supervisors, we should direct our resources to helping banks improve their controls, culture and clarity in respect to risk management. in so doing, i believe that we will help achieve our objective of a stable and healthy banking system that contributes to the proper functioning of the economy. thank you very much.

measures in relation to ccm and its current situation. before that, however, i should highlight what is a primordial starting point : ccm is a credit institution with a positive net worth. that is to say, and in the vernacular of the press, the institution has no " hole " in its balance sheet. yet this does not mean it is not facing serious problems, the cause of which must be sought in an inappropriate management of risk and a forceful business expansion – especially in the real estate sector – funded largely through resort to the international bond markets, generating sizable imbalances. past experience shows that these credit expansion policies are very dangerous if unaccompanied by the related risk control measures since, generally, they usually entail a relaxing of credit standards. responsibility for these decisions falls on ccm's previous directors. given ccm's problems, the banco de espana ’ s supervisors had considered the institution worthy of " special monitoring ". that justifies the constant vigilance of developments in ccm's risks, solvency, profitability and liquidity, since it was considered to be particularly vulnerable to a downturn in the business cycle and, in particular, in the real estate market. in the past year, ccm was subject to two inspections, with the second review based on year - end figures for 2008 currently drawing to a close. allow me to focus on the recommendations made by the central bank in its supervisory capacity in recent years. back in 2003, the recommendations detailed further to inspection called on ccm's directors, as was the case at other institutions, to reflect on the amounts assigned to funding real estate development activity, owing to the high risk this entailed. these concerns were taken into account in the ongoing monitoring of the institution and were reiterated in the letter of requirements following the first inspection carried out in 2008. these requirements referred to a sizeable volume of exposures in which some degree of impairment or weakness was apparent, denoting a deterioration in the quality of lending, which was accounted for by the global financial crisis and its impact on developments in the real estate sector and by other specific factors. the letter of requirements urged the board of directors to analyse risk policies and decisions, and to urgently apply the measures needed for a more effective management of bad debts, demanding as at that date an increase in write - downs. all these recommendations and requirements simply reflected the supervisor ’ s concern about credit - expansion and risk - management policies