##ing the innovation in the banking sector. consumers seemed to increasingly weigh convenience over safety, as a number of non - banks increased their market share. to a lesser degree, but still concerning, was that of the convenience factor. it drove some small business borrowers to move away from lenders with whom they had longstanding relationships. in some cases, those borrowers were even willing to pay much more for credit for the sake of convenience. unfortunately, some borrowers learned the hard way that convenience does not always outweigh a banking relationship — particularly when a business or community experiences a significant hardship such as a natural disaster. i regularly heard stories of how small businesses that borrowed from an online lender were unable to reach anyone to discuss their situation during a crisis and ultimately had their loans called because of missing a payment. in these situations, i also heard stories of how the local community bank that understood the local situation and wanted to see the business and the community survive, would step in, and refinance the original loan to help the small business 1 / 7 bis central bankers'speeches return to more normal operations. i also heard about challenges with core processors and how legacy contracts and a lack of competition for core processing services was stifling innovation. we saw several fintechs become “ mainstream ” nationally, and we saw a proliferation of technology solutions targeted at helping community banks become nimbler in adding new products and services. from a supervisory perspective, the federal reserve actively explored ways to reduce regulatory burden and provide greater transparency into the work of bank supervisors. using research presented in prior years at this conference, we applied findings showing the disproportionate regulatory burden borne by our smallest institutions and looked across our processes to find ways to tailor our supervisory model to more accurately reflect the risk posed by these smaller financial institutions. and then came march 2020 and the arrival of the covid - 19 pandemic in the u. s. despite the many choices consumers have for managing their money and purchases outside of the traditional banking system, we witnessed a systematic flight to the safety of fdic - insured deposits in state or nationally chartered banks. specifically, total deposits at all fdic - insured institutions increased by 22 percent when comparing deposit data from 2019 to 2020. 1 small business lending also increased significantly. from the end of 2019 to the end of the second quarter of 2020 alone, small loans to businesses at community banks, a proxy for small business lending, increased by 39 percent.

yves mersch : productivity in the financial services sector opening remarks by mr yves mersch, governor of the central bank of luxembourg, at the bcl - suerf conference on “ productivity in the financial services sector ”, luxembourg, 11 - 12 november 2008. * * * it is my pleasure to welcome you on behalf of the banque centrale du luxembourg. you probably know that ours is a relatively young institution and hat we are hosting this conference as part of the celebrations for our 10th anniversary. you are here to discuss productivity in financial services, and you re probably aware that tomorrow evening ( following the end of this conference ) here will be a high - level panel where three senior central bankers will provide heir perspective on the challenges for monetary policy represented by financial sector growth and productivity. we hope this will give you a chance to see how some of the issues raised in your research are implemented in practice and also how new issues appear in the policy context requiring further study. in any case, you are warmly invited and i hope at least some of you will be able to stay with s for this interesting discussion. the subject today is productivity in the financial sector, and as a central banker, i o not need to remind you that this sector is going through what are sometimes called “ interesting times ”. during the recent financial turmoil, central banks responded to short - term tensions and contributed to stabilising conditions for borrowers and lenders. the focus until now has been on liquidity and financial stability issues ; however, as light appears at the end of the tunnel, policymakers are asking themselves how to avoid repeating the same mistakes next time. an overhaul of the regulatory framework seems inevitable and in this context, it is crucial to understand the structural issues in the sector behind the short - term volatility. this is why i believe that careful study of financial sector productivity is required to improve our understanding of the current situation and to shape our long - term response to recent events. i will organise my remarks around three inter - related questions : first, to measure productivity, how should we measure the level of production in financial services? second, what do existing measures of financial sector productivity tell us about its sources of productivity growth? finally, i will attempt to identify which aspects of productivity in financial services have been given new urgency by recent events. let me begin with the measurement of financial services output. not long ago, national accounts methodology underwent a significant improvement in evaluating and allocating financial services indirectly measured (