has a few dimensions to it. the first dimension won ’ t surprise you or your boards : cybersecurity. i ’ m sure i don ’ t have to explain too much why this keeps me awake at night. suffice it to say that as i think about the kinds of risks that might cause the next crisis, cybersecurity is the one that worries me the most. the worry is not focused solely on the financial sector. this is much bigger than just banks. it includes many other sectors, most notably, the retail sector. in particular, cyber threats pose a potentially systemic risk to financial stability through the disruption or corruption of critical payment, clearing and settlement systems and related data. a big question we need to think about is how firms, big and small, can protect themselves from these risks. as i have noted in the past, all of us face quite a bit of work ahead on the cybersecurity front. importantly for us, as supervisors, we must determine the best areas of focus given our bis central bankers ’ speeches perspective and the range of skills that we can bring to the topic. for example, in the nearterm we are continuing supervisory plans related to cyber security work at the complex financial institutions. we are also identifying “ core ” expectations for smaller firms so that they, too, can take appropriate measures to harden their defenses. we are also undertaking concentrated work to : develop a better understanding of vulnerabilities and emerging practices : develop an approach to enhanced communications around cyber events, and revisit supervisory guidance in this area. the initial work will require a deeper assessment of the interconnectedness of firms and the prioritization of critical operations. we will be working with all of you to do that. once we all have a better understanding of the areas of risk, we all need to focus on timely and centralized communications across all firms. finally, while there is a lot of guidance in this area, we recognize that we need to review our supervisory approach and our tools to ensure we are in the best position to understand and assess vulnerabilities. this step is critical so that we can make timely and informed decisions that enhance the effectiveness of our supervisory framework for cybersecurity. i think we ’ ve done a reasonable job in developing rules and regulations to ensure firms are prepared to withstand the other types of shocks we have experienced in the past. but, cyber adds an element to planning for the next crisis that goes beyond what

to 3. 0 % this and 3. 5 % next year, driven, as so far, by investment and exports ( which posted an exceptionally high growth rate in 2016 ). household consumption is likely to provide an increasing contribution, mostly owing to the recovery in the labour market. as exports significantly outpaced imports in 2016, the trade deficit narrowed by 21 % compared to the year before. reflecting further improvement of the investment ambience, the inflow of foreign direct investment was high and project - diversified – most notably in export - oriented sectors. it came close to eur 1. 9 billion in 2016 and was more than sufficient to cover the current account deficit. furthermore, thanks to all results of macroeconomic stabilisation, an international financial institution issued the first long - term dinar security. namely, in december last year the ebrd issued a three - year dinar bond, which will be traded on the belgrade stock exchange. the dinar proceeds will be on - lent to local enterprises, notably smes. this move underpins the dinarisation process, which remains among our strategic commitments. finally, please remember these figures, they are very simple. we ended last year with year - on - year inflation of 1. 6 %, the fiscal deficit of 1. 4 %, the current account deficit of 4 %, and the npl level of 17 %. we intend to further improve these results which have exceeded the expectations of many. ladies and gentlemen, dear colleagues, thank you for your attention. i will now give the floor to my colleagues.