, which among other things regulated the way in which the voting rights attaching to their ordinary shares would be exercised ; the share capital covered by the counterpact increased progressively from an initial 13. 5 per cent to 27. 7 per cent. individually, the parties to the counterpact owned shareholdings that did not exceed 5 per cent. consequently, their share purchases were not subject to prior authorization by the bank of italy and were in compliance with the ceiling designed to ensure separation between banking and commerce. this ceiling does not apply to shareholders ’ pacts as such. the existence of two opposing pacts gave rise to a state of conflict within the body of shareholders and the board of directors of bnl, engendering uncertainty in the management and operation of the bank and impeding initiatives for its revival and growth. 3. 2 banco bilbao vizcaya argentaria ’ s application for authorization to acquire control of bnl on 18 march 2005 bbva gave the bank of italy prior notification of its intention to acquire a controlling interest in bnl by means of a voluntary exchange tender offer for all of bnl ’ s ordinary shares. on 13 may, after completing the required consultation procedure with the bank of spain and receiving clarifications from bbva concerning the procedure for the exchange tender offer and its business plan for bnl, the bank of italy authorized bbva to acquire, by means of an exchange tender offer, a holding of more than 50 per cent of bnl ’ s share capital. the application process lasted a total of 56 days, from the prior notification on 18 march to the authorization on 13 may. counting from 29 march, the date on which the formal application for authorization was submitted, the process took 45 days, including a suspension of 19 days for consultation with the spanish supervisory authority and for the acquisition of additional information from bbva. in a note dated 30 may bbva asked the bank of italy to modify the authorization issued on 13 may by eliminating the requirement to exceed the 50 per cent threshold. in a note dated 10 june the bank of italy responded that if as a result of the exchange tender offer bbva were to acquire a holding of less than 50 per cent of bnl ’ s share capital, the bank of italy would evaluate the suitability of the new ownership structure to carry out the necessary reorganization. the major strategic and operational investments necessary to relaunch bnl require an ownership structure that can ensure stable management and effective policymaking, ultimately to safeguard the

instructed that we should review the housing reform and the real estate development experiences in full scale so as to identify the broad target and tasks in the future. i think we should focus on the following aspects in studying the housing financial system : first is the products system. a variety of financial products should be developed to serve different purposes and customers. currently, we don ’ t have such housing financial products that are targeted at special groups of people in the society, such as low - income families and entry - level staffs. even in commercial housing financial field, bank loans are the major products, so risks are excessively concentrated in the banking sector. we should promote housing financial products innovation to ward off risks. second is the market system. housing financial market should consist of different layers, including not only the indirect credit market, but also direct financing market which provides both direct financial instruments and marketplace to defuse relevant risks, such as credit maturity mismatch and liquidity problems. development of the housing financing should also rely on the development of the capital market and money market. third is the organization system. housing financial market should comprise not only financial institutions providing direct financing to the customers, but also institutions that involve in housing construction, trading and consumption such as the property appraisal agencies, loan insurance ( guarantee ) institutions, accounting offices, law offices and rating institutions etc. iii. research should be conducted down to the earth to formulate a proper development blueprint. both academics and governments have made great efforts to improve china ’ s housing financial system by studying international experiences, with some policies achieving good results while others entailing further studies. starting in 2003, the pbc has focused on resolving the strategic issues of housing financial development and communicated with the ministry of construction, the china banking regulatory commission and have reached important consensus. in 2005, the pbc began to cooperate with the world bank in relevant research and study program aimed to learn from the mature experiences of other countries. this seminar represents a further endeavor in this direction. i would like to give my personal views about the comprehensive research project : first, we must learn the essence of other countries ’ experiences, not only the surface. attention should be paid to successful experiences and failure lessons. the housing financial system of china and development strategy should be designed through summarizing experiences and exploring the embedded rules. second, chinese social, financial and economic situation should be fully considered and market development principles should be observed when mapping out our housing financial system and the development