average, they provide the necessary capital buffers to properly address the elevated risk profile of greek banks. nevertheless, restoring the capital position of greek banks represented only the first step of a more comprehensive reform plan to restore confidence in greek banks. over the past months the focus has been on the resolution of non - performing loans ( npls ) and on improving bank governance. the non - performing exposure ( npe ) ratio of greek banks is very high ( 49 % in june 2016 ), the second highest in the euro area, after cyprus. its reduction is a key precondition for gradually restoring an adequate and efficient supply of credit to the greek economy, and for achieving sustained growth. some important legislative reforms in this direction have already been passed. for instance, the household insolvency law was amended to ensure that banks can take legal steps against strategic defaulters and that debtors make payments in line with their ability to pay. and the code of conduct of the bank of greece provides guidelines on the interaction between banks and debtors in arrears. the authorities have also adopted legislation that liberalises npl servicing for all loan categories, and provided a framework for the sales of loans. in addition, banks have set up comprehensive strategies, including detailed operational measures and actions, prioritised and scheduled, as well as numerical targets to significantly reduce their npe stocks over the coming years. banks are also reshaping their governance structures in compliance with new greek regulations and international regulations and guidelines. while the process is still ongoing, considerable progress has already been made in the review of boards of directors. strict application of the criteria set under greek law will be key to increase the knowledge, relevant experience and independence of bank directors. the policy actions i have outlined have already started to show effects. since the imposition of 2 / 4 bis central bankers'speeches the capital controls in greece in june 2015, the liquidity position of greek banks has improved, albeit at a slow pace. deposits have increased slightly and banks have regained access to market funding based on high - quality collateral. dependence on central bank funding has been reduced to about €78 billion. working together towards the same goal while the conclusion of the first review constitutes a first major step in safeguarding financial stability, preparing the ground for a sustainable economic recovery and regaining access to international capital markets, let me be very clear : more is yet to be done. the mere fact that bank deposits linger at about three - quarters of their level of

rodrigo vergara : the monetary policy report and the financial stability report presentation by mr rodrigo vergara, governor of the central bank of chile, before the finance commission of the honorable senate of the republic, santiago de chile, 16 june 2014. * * * the monetary policy report of june 2014 and the financial stability report of the first half of 2014 can be found at http : / / www. bcentral. cl / eng / index. asp. introduction mr. president of the senate ’ s finance commission, senator ricardo lagos, senators members of this commission, ladies, gentlemen. thank you for inviting me to present the vision of the board of the central bank of chile on recent financial and macroeconomic developments, their prospects and implications for monetary and financial policy. this vision is detailed in our monetary policy report ( ipom ) of june 2014 and in our financial stability report ( ief ) of the first half of 2014. domestic output and demand have been slowing down for some months now. the drop in investment that began a few quarters ago has been compounded with weaker private consumption. as a matter of fact, in the forecast scenario i will be describing briefly we have revised downward our growth estimate for 2014, as a result from this behavior of private consumption and the larger than expected fall in investment. abroad, the trends we have depicted in our latest monetary policy reports have not varied much. the developed world is showing sustained recovery while at the same time the emerging world is decelerating. one point worth noting is that the volatility of international financial markets has diminished. in the domestic monetary policy front, a significant development of recent months has been increased inflation, which is now above 4 percent in annual terms. although this was expected to some extent because of inflation ’ s previous level and especially because of the normal pass - through of the exchange rate depreciation to domestic prices, the actual figure exceeded not only our latest ipom ’ s forecasts but also private expectations. our projection scenario assumes that inflation rising above 4 percent is a temporary phenomenon and that it will return to 3 percent annually within our normal monetary policy horizon, a vision that is also reflected in medium - term private inflation expectations, which have remained at 3 percent. in this context, the board has communicated that it will consider the possibility of making additional cuts to the monetary policy rate in line with the evolution of domestic and external macroeconomic conditions and its implications on the inflationary outlook. the slowdown in output