IPSs have to obtain the same improvements in organisation, efficiency, economies of scope, diversification and quality and unity of management as traditional mergers. They must do so in the same length of time as a normal merger, and they must strive to ensure that their results are clearly perceived by the markets as lasting. 2  BIS Review 173/2010  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.
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 response to an unquestionable substantive need: the downsizing of the Spanish banking sector, following the excesses of the growth period prior to 2007. These factors left many institutions facing the challenge of a future far removed from the comforts that had characterised the previous period, namely: strong economic growth, abundant liquidity on international markets, extensive business margins and healthy assets.