, would have cut their teeth in business through the route of micro and small enterprises. 6. secondly, msme sector is crucial for the success of the national agenda of financial inclusion. let me explain. normally, when we talk about financial inclusion, we do so largely from the perspective of an individual or at best a household. however, to my mind, universal financial inclusion cannot be considered to have been achieved unless it is ensured that the micro and small businesses are financially included. credits to these small family run or individual run entities from the formal financial channels would make these businesses sustainable and help them move out of poverty and propel them to a better quality of life. 7. the surmise that i am trying to drive at is that if this is the sector that is the bulwark for such critical developmental paradigms, there are compelling enough reasons for all stakeholdersbe they the associations, the financial institutions, the regulators or the government, to put annual report, ministry of msme 2015 – 16. bis central bankers ’ speeches all their might together in a convergent fashion so that the right environment is created to propel growth of msmes in our country. 8. for achieving this objective, there is a need to create an ecosystem which can facilitate handholding and nurturing of msme units particularly at the nascent stages. also, there is a need to eliminate a host of impediments – of permits, of inspections, of red tape and provide a set of enablers – skill development, infrastructure, markets, technology etc. however, of all the enablers, probably none is more important than credit. the ifc / mckinsey has estimated the credit gap for formal and informal msmes worldwide at around $ 3. 9 trillion globally, of which $ 2. 1 to 2. 6 trillion is in emerging markets. the abcd of credit 9. as i said, credit is perhaps the most critical component for msme entrepreneurs. provision for credit is essentially dependent on four pivotal issues which i would call “ abcd ” of credit. let me take you through each of them and also explain what we are doing to iron out these issues. a ) the a of credit – access / availability 10. the 4th all india survey of msmes states that close to 90 per cent of msmes are dependent on informal sources, which by any standards is a worrisome figure. since that survey, some headway must have been made in improving msmes ’ access

as well as the losses experienced during the last financial crisis. given the big banks ’ significance to the swiss economy, it is important that they remain adequately capitalised in the event of such losses occurring. this brings me to the second pillar of the tbtf2 regulations – resolution. here, too, both big banks have made progress. on the one hand, since june 2016, credit suisse and ubs have significantly improved their gone - concern loss - absorbing capacity. to this end, they issued further bail - in bonds, which can be converted into equity in the event of impending insolvency. on the other hand, the two big banks have implemented key organisational measures. for instance, they have both set up swiss subsidiaries that contain their systemically important functions, including, in particular, domestic deposit and lending business. in order to resolve the ‘ too big to fail ’ issue in switzerland, more progress also needs to be made in the area of resolution. this will involve, first, further improvements in gone - concern loss - absorbing capacity in a gone - concern perspective, as stipulated in the regulations and, second, further progress in drawing up robust resolution plans. by end - 2019, the big banks will need to demonstrate that they would be able to maintain their systemically important functions in switzerland without interruption in the event of impending insolvency. the resolution plans will also need to meet foreign regulatory requirements. domestically focused commercial banks i will now turn to domestically focused commercial banks, whose main business is in lending and deposit - taking. i would like to highlight three key developments at these banks. first, domestically focused banks further increased their risk exposure in 2016. mortgage growth at these banks remained strong. moreover, their interest rate risk exposure from maturity transformation continued at high levels. in addition, they took on greater affordability risks and the share of new mortgages with a high loan - to - income ratio reached a new peak. all this took place against the background of high imbalances on the swiss mortgage and real estate markets. although these imbalances declined slightly in 2016, they are still at levels similar to those in 2014, when the sectoral countercyclical capital buffer ( ccyb ) was set at 2 %. 1 final requirements refer to the requirements that will apply after expiry of all transitional provisions, and in particular to the qualitative requirements for going - concern capital. page 2 / 3 berne, 15 june 2017 fritz zurbr