backbone of the banking industry, financial stability is a crucial factor for success. in this context, it is interesting and certainly promising to note that the two big swiss banks now emphasise their strong capital position as an important competitive advantage. nevertheless, to be on the safe side regarding a level playing field, ideally all regulatory reform should be internationally coordinated. to this end, the snb is investing very substantial resources to contributing actively to international regulatory reform projects, especially within the fsb and the basel committee. indeed, a main raison d ’ etre of these international bodies is to ensure a level playing field. we must accept, however, that not all countries are confronted with the same urgency for reform as we are in switzerland. as i have already explained to you this evening, given the size and importance of our banking sector, our country is particularly vulnerable to a financial shock. agreeing on an international common denominator of regulatory reform may turn out to be insufficient for the swiss case. ultimately, it will be a political decision to choose the level of risk switzerland is willing to accept, both for the financial and for the real sector. given the particular situation in switzerland, higher - than - average regulatory standards are warranted. conclusion the worst of the crisis is behind us, and intensive efforts are underway to increase the resilience of the financial system. banks are again generating profits. in some cases, these profits are very substantial and are clearly linked to the public support measures, many of which are still in place. as the situation improves, complacency can easily become the rule of the game. we will forget the severity of the crisis and fall prey to lobbying by a powerful and recovering financial industry. ladies and gentlemen, we must not let this happen. the stakes are simply too high. equally, the most prominent banks should invest their efforts, not in resisting fundamental change, but in genuinely supporting the work to bring it about, in the interests of a more longterm and less volatile global banking and, ultimately, economic growth model. if we fail to reform fundamentally the financial system and the position of the largest systemically relevant firms in that system, we will undermine one of the most basic mechanisms of any market economy, namely that of punishing failure. what is more, we will – to quote mervyn king – bequeath to future generations a serious risk of enduring another crisis even worse than the one we have just experienced. 16 my biggest concern is that a future

swaminathan j : msmes - bridging the credit gap through improving confidence in lending speech by mr swaminathan j, deputy governor of the reserve bank of india, at the ceo forum of the federation of telangana chambers of commerce and industry, hyderabad, 16 november 2024. * * * shri suresh kumar singhal, president ftcci, shri r ravi kumar, senior vice president ftcci shri k k maheshwari, vice president, ftcci, mr. meela jayadev, convenor, ftcci ceo forum, chief executive officers gathered here today, ladies and gentlemen. a very good evening to you all. i am delighted to speak to you today on a topic that has always been close to my heartthe critical role of msmes and the importance of building confidence in lending to this vital sector. over the years, i have had the opportunity to work closely with msme units, witnessing both their potential and their struggles. in the early days of my career, as a young officer posted in the bustling peenya industrial area, i saw firsthand the energy and resilience that defined msmes, as well as the unique challenges they faced. later, mid - career, my experience deepened while working in the mid corporates group of sbi, where i further understood how access to timely and adequate credit could transform these businesses. these experiences have made me keenly aware of the importance of bridging the credit gap for msmes - a task that demands not only innovative solutions but also a firm commitment to fostering confidence among lenders and borrowers alike. as you are all aware, the msme sector plays a vital role in our economy, driving entrepreneurship and creating substantial employment opportunities. these enterprises serve as essential support units for larger industries and contribute significantly to the secondary and tertiary sectors. with approximately 6. 3 crore units1, msmes contribute nearly a third of india's nominal gdp and account for over 40 per cent of the country's exports2. more importantly, they play a crucial role in employment, generating over 22 crore jobs3 and holding immense potential to harness india's demographic dividend. thus, the msme sector not only powers economic growth but also uplifts the poor, providing livelihoods and fostering inclusive development across the nation. despite the critical role of the msme sector in the indian economy, a common grouse that we hear from this segment is that they find it difficult to secure timely and