health of the financial system, and put in place any measures that may from time to time be necessary to address any elevated risks to the system, whether from internal sources or from abroad. each year a financial stability report is published, reporting on the health of the system, with an update at mid - year. today we share with you the report of our mid - year assessment. we are well aware that there are ways in which our financial system needs to be improved. we have never had a perfectly competitive financial system, and if we are realistic we will admit that our financial sector is too small to attract many players. we should think of other ways to encourage higher levels of service and efficiency on the part of financial institutions. as you know, individual savers do not do very well at commercial banks, earning 2. 5 percent on savings only because the central bank stipulates that minimum. it is no secret that banks are unhappy that there is a minimum at all. i am suggesting to individuals that, for all their rainy day savings, they consider government savings bonds instead. savings bonds are just as convenient as savings deposits, because you buy them at commercial banks, and they are just as liquid as savings deposits, because you can cash them in at any time. however, if bis central bankers ’ speeches you hold them for the full five years of their maturity you earn an interest rate in the region of 5 percent, compounded over 5 years. one area which our financial sector does not serve very well is the financing of innovation and of small and medium enterprises. this is an area of exceptionally high risk, into which conventional financial institutions no longer have any incentive to enter. the stipulations for reserves and provisions against possible loss are now so stringent that even small portfolio allocations for high risk high return propositions may no longer be viable. conventional institutions, even insurance companies and others with a long horizon, may not be the best sources of funds for smes in their initial years. new firms should start with equity funding, so as to avoid debt service obligations during the formative period of the enterprise, before it has a regular clientele and a dependable cash flow. some new firms have been successful in finding equity, in spite of the absence of an organised market for venture capital in barbados, and some capital has been provided, over the years, by ngos and others. we need to continue the search for better arrangements for equity funding of new ventures. there are issues which

future? in principle, non - financial corporate bonds issued in any euro area country, including greece, can be included in the pepp if they meet the relevant eligibility requirements, including the minimum rating threshold. for the time being, no greek corporate bonds qualify. but i hope that this will change in the future. over the past decade, prudential issues such as non - performing loans ( npls ) have been very challenging to deal with. npls have been one of the main structural problems in the greek banking sector, preventing investment and growth in the greek economy. as the euro area economy is heading towards a recession, which could prove long and deep, a new generation of npls could appear – and not only in greece. how is the ecb planning to deal with such a contingency? will the plans put in place to deal with the current challenge of npls be enough when the coronavirus crisis comes to an end? the crisis will certainly have negative effects on bank balance sheets. but this time, banks are not the cause of the crisis ; they rather have to be part of the solution. and they are in much better shape now, with more capital and a better liquidity position. the supervisory arm of the ecb has implemented significant measures to allow banks to continue to provide funding to firms and households. ecb banking supervision has communicated to banks that it will use maximum flexibility in evaluating the progress of ongoing plans to reduce past npls. it is important that we find the right balance between helping banks absorb the impact of the current downturn and identifying risks, deploy sustainable solutions for viable distressed debtors. only a strong, but at the same time sufficiently flexible, banking system is able to meet the financing needs of people and businesses. christine lagarde has mentioned that aside from what the ecb can and will do, the member states of the euro area should assume their responsibilities on the fiscal side. the esm is exploring various options towards that end, although differences among member states remain. would the ecb consider eurobonds in the form of “ coronabonds ” as a proper way forward in order for the euro area economy to counter 2 / 3 bis central bankers'speeches the economic impact of the virus? and could urgent circumstances lead to the activation of the “ omt bazooka ” being delinked from an eccl programme? these are political decisions, which are not within the ecb ’ s remit. that being said,