, the country's fx reserves hit their record high of eur 21. 2 bn. last year, the national bank bought eur 1 bn net in the interbank fx market. since the start of this year, we have bought additional eur 435 mn net. confidence in the financial system has also been preserved, as confirmed by the continued rise in total deposits in banks, which in late 2022 exceeded the 2019 figure by over 40 %. the npl share in total loans was reduced to a record low of 3 % at end - 2022. during the three crisis years – from 2020 to 2022, serbia was recording real economic growth of around 9 %. this year, real growth is expected to equal between 2 % and 3 % and gdp per capita to reach around eur 10, 000 for the first time. the unemployment rate is at its lowest, and private sector formal employment at its highest – close to 10 % above the pre - pandemic level. this means that 150, 000 more people are employed now than before the pandemic. in december, total average wage was higher by 36 %, while private sector wage exceeded the precrisis figure by as much as 46 %. we have also ensured conditions to attract a record high level of fdis, worth eur 4. 4 bn last year, i. e. 7. 1 % of gdp. stability and resilience of the domestic banking sector ladies and gentlemen, i began my address with the macroeconomic environment in which banks in serbia operate as trends in the financial industry always depend on real sector developments, and vice versa. good regulations and efficient supervision of financial institutions are also important. while some countries have a complicated supervision system and a huge problem of coordination among different supervisors, the banking sector supervisory function in serbia is exercised by a single institution – the national bank of serbia. the advantages of such organisation of the supervision system and the quality of supervision are reflected in a stable financial system. it is confirmed now as well – during the current developments in the international financial market – that the national bank of serbia is rightly cautious in easing its regulations. we do nothing " on request ". we do not fulfil anyone's wishes as we are guided by financial system security and the protection of interests of depositors and bank clients. this is our statutory objective and it is only in such way that we can best contribute to overall stability. that the nbs's approach is adequate

r gandhi : regulating financial innovation - p2p lending platforms design challenges valedictory address by mr r gandhi, deputy governor of the reserve bank of india, at the mint marketplace lending summit, mumbai, 17 may 2016. * * * 1. i am very happy to be addressing this conclave to debate the discussion paper that the reserve bank has recently presented for public discourse on regulating the peer to peer lending platforms. let me first explain the rationale for financial regulation in general and regulation on financial innovations in particular. let me also discuss the different approaches that the reserve bank had employed in the past in dealing with financial innovations and finally the challenges that we have on hand in designing an appropriate regulatory approach to the peer to peer lending platforms. financial regulation 2. the traditional neo - classical economic theory argues that unrestricted or laissezfaire competitive equilibrium is the most efficient economic arrangement. this is built on pareto equilibrium and on the assumptions of perfect competition, with no externalities and no destructive competition. 3. many academic liberals are doubtful of the benefits of regulation of financial services. their case, as effectively summarised by david llewellyn in his paper “ the economic rationale for financial regulation ”, goes like this : there are no market failures or imperfections ; if they do exist they are not sufficiently serious to warrant regulation ; regulation may not in practice solve these failures ; or if it does, it can do so only by imposing costs that exceed the costs of the original problem ; serious moral hazards may arise when regulation is imposed ; and regulation imposes a wide range of costs which are paid ultimately by consumers. 4. another set of argument against regulations is that financial regulations actually serves the interests of the financial service providers and mostly detrimental to consumers, particularly because regulation results in reduced competition. as g. j. benston points out, this happens because financial regulations typically include restrictions on entry, controls over products, restrictions on allowable business, restraints on prices, portfolio restrictions, restrictions on geographical diversifications, etc. 5. however, several other academics find that the validity of the neo - classical assumptions, when applied to the financial sector, do not hold good as there are in reality imperfections, information asymmetry, incompleteness, and failures in perfectly competitive or laissez - faire financial markets. 6. they argue that financial systems, markets and participants need regulation. arguments range from the need for regulation per se to the need to avoid consequences of