term of five years in which the shares it holds must be disposed of to third parties through a competitive procedure. * * * in sum, we are at the last stage of savings bank restructuring. the aim is that by 30 september the various steps outstanding should have been completed. this is the bis central bankers ’ speeches timeframe set by the royal decree - law on the reinforcement of the financial system, although an exceptional three - month extension for operational reasons and a further three months in the event of an ipo would be possible. in recent years our banking system has made a very intense balance - sheet write - down drive ( equivalent to 9 % of gdp in the three years from 2008 to 2010 ), it has evidenced unprecedented transparency in respect of its most problematic exposures, and it has recapitalised drawing on private funds and also with relatively limited public aid when compared with other countries. in turn, spanish legislation has risen to the challenges posed by the crisis with a raft of measures. these include most notably, due to their intended durability, the establishment of new solvency requirements, the modernisation of the legal regime governing savings banks and the creation of more flexible and efficient banking crisisresolution instruments. we trust we will move into autumn with all our homework completed. thank you very much. bis central bankers ’ speeches

began to manage their exposures to operational risk separately and as a comprehensive practice comparable to the management of credit or market risk. by the late 1990s, it became increasingly clear to leading banks and their supervisors that the original accord no longer provided meaningful measures of risk for the most sophisticated banking organisations. as a result, the basel committee and others began to discuss ways to revise the existing capital rules to account for these advances. supervisors sought more than a simple revision of the existing framework. we wanted to align our capital requirements more closely with the best measures of economic risks that banks actually face. we sought furthermore to fortify the stability of the banking sector so that banks could continue to serve as a source of credit through good years and bad. in our view, promoting financial stability will benefit not just banks, but also other businesses and consumers as well. to incorporate the latest advances in risk management, and to develop a more forward - looking approach to supervision, the committee embraced a “ three - pillar ” approach to capital requirements. rather than simply setting out a static minimum requirement for capital levels, the new capital framework will rely on three mutually reinforcing policy approaches. they consist of, first, risk - sensitive minimum requirements ; second, a more consistent system of supervisory review ; and, third, enhanced transparency and market discipline. each of these three pillars offers unique benefits on its own, but the real strength of the three pillars stems from their ability to complement each other. the first pillar - which specifies the minimum capital requirements - constitutes a very direct approach to supervision. by applying a uniform set of rules to banks, the first pillar adds transparency to the regulatory process. applying a shared set of rules to all banks makes it easier to compare organisations and get a sense of their relative degrees of solvency. on a technical level, the committee based the measures of risk on the advanced practices that banks are adopting. the rules reflect the evolution in credit risk management by allowing qualifying banks to rely partly on their own estimates of the drivers of credit risk to determine the amount of capital required against particular exposures. one such driver of credit risk might be the bank ’ s own estimate of a borrower ’ s probability of default. similarly, the new capital rules will reflect the advances in operational risk measurement by incorporating an explicit capital charge for such exposures to loss. so the minimum rules will align capital charges more closely to better measures of the actual underlying economic risks that the industry is developing. this is a clear example of