introductory remarks by dnb president klaas knot at the press conference for the autumn 2020 financial stability report welcome to the press conference on the financial stability report ( fsr ). before we start taking questions, let me briefly walk you through the main elements of our fsr. as in the spring, the main focus of this report is – of course – the impact of the coronavirus crisis on financial stability. this crisis has now been going on for more than six months and the feared second wave of infections is now a reality. where do we stand in this crisis and how has the financial sector fared so far? let me say a few things about that. first, uncertainty about the economic impact of this crisis remains as substantial as before. the dutch economy has so far contracted somewhat less than we feared in the spring. but the resurgence in the number of infections has fuelled renewed uncertainty, as new measures seem necessary, but also because consumers and entrepreneurs are becoming more cautious. a proper assessment of the total economic damage will only be possible once the virus is under control. and it is important to stress once again that the economy and health are not in a zero - sum game. even without measures the economy will be hit. it is therefore of the essence that everybody contributes to containing the virus. that is in the interest of our health, but also in the interest of the economy. an important – and positive – observation is that the financial system has so far proven resilient. that is of course partly due to the fact that this crisis originated outside the financial system. in that sense it is completely different from the credit crisis, when the problems started in the financial sector itself and spilled over to the economy. we can also see that the reforms undertaken after the credit crisis are bearing fruit. banks are therefore starting in a much better position, so they are better able to dampen the impact of the coronavirus crisis. governments, central banks and supervisory authorities have introduced very large - scale measures to curb damage to the economy. it is still too early to evaluate these measures, but the interventions have clearly restored a degree of calm to the financial markets. the measures also directly and indirectly help ensure that the financial sector can continue to fulfil its role effectively. but a large part of the economic impact is yet to manifest itself. when the government measures – such as the now scheme and tax holidays – are scaled back and bank moratoria expire, bankruptcies will rise. so

. 3 % this year. the eurozone will experience a mild recession. the us and japan will have positive growth, but below trend. developing asia is expected to grow by 7. 3 %. under these conditions, the growth forecast for the singapore economy at 1 – 3 % this year remains on track. 7. but it is not this year ’ s growth that policymakers or asset managers should be most concerned about. it is the medium - term growth and inflation outlook that matters. there are several structural challenges facing the global economy. i want to elaborate on two key driving forces that will shape the medium - term outlook in both the advanced and emerging economies : deleveraging and monetary expansion. deleveraging 8. let me begin with deleveraging. from around 1990, debt levels began to rise rapidly in most advanced economies. governments ran persistent fiscal deficits that were financed by borrowing. total government debt in the oecd economies grew relentlessly, from 58 % of gdp in 1990 to 98 % in 2010. households went on a consumption binge, financed by easy borrowings on the back of rising property prices and housing equity. household debt in the developed economies also climbed, from 62 % in 2000, to 76 % in 2010. deleveraging is the process by which this excessive debt is brought down to more sustainable levels. this will be long - drawn, only because the build - up of leverage took place over such a long period of time. synchronised deleveraging in the us and eu 9. the deleveraging process that is unfolding across the advanced economies is taking place across three fronts : governments in the us and eu households in the us banks in the eurozone 10. first, deleveraging by governments. the public finances of the us, uk, and the eurozone, have substantially deteriorated, due to pre - crisis fiscal profligacy and post - crisis discretionary stimulus. these countries have now embarked on fiscal adjustment programmes to varying degrees, primarily through austerity measures. fiscal consolidation is expected to shave off a cumulative 2 – 2. 5 % points from gdp growth in the us, uk, and the eurozone over the next three years. 11. second, deleveraging by us households. since the bursting of the credit bubble in 2008, us household debt has declined by 5 % in absolute terms and 15 % as a percentage of disposable incomes. more than two - thirds of the reduction in debt stock