to ensure that their results are clearly perceived by the markets as lasting. in this connection, it is vital that the initiators should be particularly diligent in countering the danger that the “ raw novelty ” of this legal formula – whose features have had to be rapidly devised – may be used as an excuse for rigidities, procrastination or half - measures. compared with traditional mergers, where the combining of objectives and efforts to advance in a single direction is more natural, all the participants in ipss must be on their guard to prevent the essential goal of unity from becoming distorted. they must strive to ensure that the mind - set of directors, managers and staff alike is geared towards a single goal ; individual visions are no longer appropriate here, and nor are decisions not aimed at achieving a better future for the single corporate project that has replaced its predecessors. all the participants in institutional protection schemes are assuming a very specific responsibility here, an institutional responsibility and a personal responsibility. the single economic entity resulting from the ips – the aggregate – must be profitable and efficient, well - managed and display dynamism befitting the financial sector so as to provide the services demanded by the real economy with quality and at competitive prices. evidently, in a setting of clear risk - aversion, the road to attain these goals and to convince savingsbank creditors of them, so that they renew the funding they have provided, is not an easy one. this task requires three basic conditions. first condition : resolve in adopting the measures needed using exclusively corporate criteria, in full knowledge that some of them may not be agreeable owing to the personal sacrifice entailed. to achieve this, it is essential that all the interest groups behind the governance of the merged savings banks should identify with the goals of the single project. second condition : flexibility and speed in adopting these measures. as the saying goes, time is precious. the need to access wholesale funding markets as from the first fortnight in january in 2011 and the greater capital requirements imposed by the regulations in the pipeline and by the widespread increase in the perception of risk should be a spur to all, and they impose a clear - cut reduction in all the timeframes envisaged for the conclusion of the projects. in practice, the timetables for the concentration plans suggested some six months back must be significantly shortened. implementation of the various steps must be brought forward, with every extra effort and sacrifice needed being made. third condition : determination in transmitting

javier ariztegui : savings bank restructuring and institutional protection schemes speech by mr javier ariztegui, deputy governor of the bank of spain, at the conference organised by caja granada, granada, 17 december 2010. * * * it is a pleasure for me to be able to share with savings banks professionals and spanish financial system specialists some reflections on what are known as “ institutional protection schemes ” ( ipss ). and it is all the more satisfying to do so in a city as magnificent as that hosting the event today. my thanks, then, to caja granada for kindly inviting me to participate in the closing of this conference. the year 2010 now drawing to a close has been a difficult one for the spanish banking system, whose activity has continued to unfold in a sluggish economic setting marked by financial markets that have not yet managed to attain the degree of stability and confidence needed. it has thus been a year replete with management challenges, intellectual debates and legislative initiatives. but if we must choose one specific milestone marking it above all others, 2010 has been the year of merger agreements between savings banks, in possibly the most extensive banking concentration process ever undertaken in our country. a sizeable portion of these agreements has taken the form of institutional protection schemes or – to make a further addition to the plethora of acronyms and initials characterising today ’ s financial jargon – ipss. while as a general rule i am against this invasion of jargon, perhaps in this specific case the initials are preferable to the longer version, because ipss, the focus of this conference, are not merely “ institutional protection schemes ”, or legal instruments suitable for securing the benefits of consolidation under capital regulations. they are and should be much more than that. ipss have arisen as an innovative structure in the banking system and, like all new products, they are best evaluated by organising their assessment in steps, or successive degrees of scrutiny, so that at the end of the process their structure can be fully appreciated. the first step in the process of evaluation will be to judge whether they are timely. the second will focus on their design and construction. the third will be a “ use test ”. and the fourth and final level of assessment will look at how readily they lend themselves to progressive development so as to cover potential future needs. allow me to cover these successive steps or facets one by one. let us start with the first, their timeliness. ipss are a