capital inflows to the united states. nonetheless, as the u. s. current account deficit rose from 1995 to early 2002, so too did the dollar ’ s effective exchange rate. evidently, upward pressure on the dollar was spurred by rising expected rates of return that resulted in private capital investments from abroad that chronically exceeded the current account deficit. the pickup in u. s. productivity growth in the mid - 1990s - the likely proximate cause of foreigners ’ perception of increased rates of return on capital in the united states - boosted investment spending, stock prices, wealth, and assessments of future income. those favorable developments led, in turn, to greater consumer spending and lower saving rates. the resulting widening gap between domestic investment and domestic saving from 1995 to 2000 was held partly in check by higher government saving as rising stock prices drove up taxable income. when, in 2002, that effect reversed and the federal budget slipped back into deficit, and as the u. s. economy emerged from its downturn, the gap in the current account balance widened further. after contracting in the aftermath of the u. s. stock market decline of 2000, private capital from abroad was apparently again drawn to the united states in substantial quantities by renewed perceptions of relatively high rates of return. in addition, during the past year or so the financing of our external deficit was assisted by large accumulations of dollars by foreign central banks. * * * even before the productivity surge of the late 1990s, the united states had become particularly prone to current account deficits and rising external net debt because of the historical tendency on the part of u. s. residents to import, relative to income, at a significantly higher rate than our trading partners, at least for u. s. goods and services. 2 if all economies were to grow at the same rate, such differential propensities would produce an ever - widening trade deficit for the united states and a corresponding surplus for our trading partners, failing offsetting adjustments in relative prices. in the 1960s or 1970s, because our trading partners were growing far faster than we were, a trade gap did not surface. when, in the 1980s, the difference in growth rates narrowed while the dollar rose, our trade and the associated current account deficits widened dramatically. by the late 1980s, we had become a net debtor nation, ending seven decades as a net creditor. while most recent data reaffirm our above - average propensity to import, there is evidence to suggest

dimitar radev : the bulgarian banking sector in 2020 – how have we coped and what is forthcoming publication by mr dimitar radev, governor of the bulgarian national bank, in the bulletin of the association of banks in bulgaria, issue 64, december 2020. * * * dear colleagues, we are approaching the banker ’ s day in a year of unprecedented challenges : first, in relation to the consequences of the covid - 19 pandemic ; andsecond, with the completion of the strategic project of the entry of the bulgarian lev into the european exchange rate mechanism ( erm ii ), simultaneously with the accession of our country to the european banking union, including to the single supervisory mechanism and the single resolution mechanism. from the banking sector ’ s perspective, there are two key questions : how we have coped to date, and what is forthcoming? our goal, defined as early as the start of the crisis, was for the banking sector to generate solutions, rather than problems. as a result of our effort in the recent years, we were well positioned for the attainment of this goal. the banking sector ‘ entered ’ into the crisis with a common equity tier 1 capital adequacy of over 19 %, and with a liquidity coverage ratio of over 260 %, i. e. times above the regulatory requirements. regardless of the good starting position, we were aware that, because of the abrupt deterioration of the environment in which banks operated, there should be new measures for further strengthening of their capital and liquidity positions. for the purpose, in march we adopted such measures with a total effect of over 8 % of gdp. they comprised full capitalization of the sector ’ s profit, significant reduction of riskier foreign exposures, and cancelling the two planned increases of the countercyclical capital buffer. the intended effect of these measures was along two key lines : maintaining lending activity and relieving bank borrowers – companies and households, by enforcing a private moratorium, proposed by the industry, on loan repayments. the results confirm that to date this effect has been achieved. as of end - october, we not only evidence no stagnation in lending, but rather the loans to companies and households have increased on an annual basis by 2. 5 % and 7. 3 %, respectively. at the same time, the approved applications for deferral of payments under the private moratorium reached nearly 109 thousand at their peak in august,