basis, as it is in this context that supervisors and supervised entities can extract full benefit from it. this availability of banco de portugal to talk to institutions on an ongoing basis, in strict observance of the diversity of their respective roles, makes behaviours in contravention of the regulatory framework even more unacceptable, an aspect that cannot be emphasised enough. 1 / 4 bis central bankers'speeches 3. the publication of decree - law no 133 / 2009 of 2 june 2009, which transposed the second european directive on consumer credit agreements, was a milestone for consumer rights in portugal. we have come a long way since then. as a result of the consequences of the financial crisis and the greater awareness of the specific practices that could be so harmful to consumers, institutions and the financial system, the regulatory framework and banking conduct supervision requirements have changed profoundly. the impetus from europe, through the publication of various directives, has been key. ten years after the financial crisis it may now be said that the retail banking markets are more transparent, not least in the all - important consumer credit segment. consumers are more protected, in that they have more rights and some of their existing rights have been broadened. the duties of information were made stronger ; upper limits were established for the annual percentage rate of charge ( aprc ) and the nominal interest rate in consumer credit agreements ; the duty of assessing creditworthiness was strengthened ; the consumer assistance obligation was created ; certain banking fees were banned or limited, and, where associated to payment accounts, became more comparable, above all after the format given to the fee comparator launched on 1 october ; a system was created for preventing and managing arrears situations, to mention just a few examples. furthermore, recent changes to the legal framework of credit institutions and financial companies place new obligations on institutions when setting their compensation and evaluation policy for workers in contact with customers in the sale of retail banking products and services, with a view to minimising the risk of conflicts of interest and avoiding potential harm to customers. the requirement was also established for institutions to introduce specific procedures for governance and for monitoring credit products, to ensure that they are suited to consumers ’ interests, goals and characteristics in terms of design and distribution. very important also is the fact that on 1 january of this year, the legal framework for credit intermediaries came into force, with the aim of broadening the perimeter of banking conduct supervision. indeed, access to banking activity now requires the prior permission

##zation of the business cycle. these developments contribute to dispel the risks of asymmetric shocks in the future. what does not disappear is the risk of an initial period of excessive expansion of expenditure and debt after joining a monetary union that guarantees a regime of low inflation and low interest rates. we have felt the consequences of this hazardous development. the economy, however, has automatic correcting mechanisms as economic agents soon have to begin restraining their indebtedness and adjusting their spending. in spite of the restrictive nature of this mechanism we could have achieved a gradual soft landing of the economy if two new factors had not made their appearance : the strong deceleration of the world economy and the budget crisis that emerged in 2001. the government had to adopt difficult measures of budget consolidation to reduce the structural deficit from – 4. 6 per cent of gdp to – 2. 5 per cent last year. the recession we are now going through, with annual growth this year around – 1 per cent, is making things more difficult for fiscal policy. more than others, we would have justification not to comply exactly with the present fiscal rules. however, as small nations always have to try harder, we still hope to be able to cope with the situation, in spite of being very much dependent on developments of the world economy. an economic recovery is definitely coming, even if some doubts remain about its intensity or duration. in fact, uncertainties remain in connection to the large unbalances existing in some economies. it is deceptive to think that everything can be solved by exchange rate adjustments. the problem is one of saving rate insufficiency and will require internal financial adjustments. in the process of global economic adjustment europe should not bear the main burden of exchange rate corrections. the responsibility of europe is to implement the necessary reforms in order to increase its rate of potential growth. we need to deal with the very serious consequences of negative demographic developments, of technological shortfalls and the requirements to flexibly adjust markets to the demands of the new international environment. we need good structural policies to restore confidence in the future. these reforms are a condition to preserve the basic features of the european model, that particular combination of stability, growth and social cohesion that has made europe a beacon of civilization. it is indeed in europe that one can find the most humane and progressive societies compatible with the human condition. but, in the present world environment, like in the hegelian “ aufhebung ”, we have to transform