of risks within the current basel accord has distorted risk - management practices and encouraged massive regulatory capital arbitrage. that is, our rules have induced bank transactions that have the effect of reducing regulatory capital requirements more than they reduce a bank ’ s risk position. consequently, the fundamental credibility of regulatory capital standards as a tool for prudential oversight and prompt corrective action at the largest banking organizations has been seriously undermined. in reflection of the considerable differences among banks that i mentioned earlier, us supervisors are developing proposals for a multi - track approach to address modifications to the regulatory capital rules, and this approach has been incorporated in the basel consultative document. within the united states, consideration is being given to a standardized capital treatment involving a quite simple regulatory capital ratio that might become applicable to the vast majority of institutions that are not internationally active. for another group of banks, change might involve such modest refinements to current capital requirements as closing certain loopholes and basing some risk - weights on available external credit ratings. for those comparatively few banking organizations whose scale, complexity and diversity warrant a more sophisticated approach to capital adequacy, the basel committee has proposed another track that, at least initially, would seek to link regulatory capital requirements to the banks ’ internal risk ratings that i discussed earlier. under this approach, the risk - weight assigned to a particular credit position would be based on the internal risk rating assigned by the bank holding that instrument. regulatory staffs in the united states and other countries are currently attempting to work out the basic architecture of such an approach. critical issues include how to validate banks ’ internal risk ratings and how to link risk - weights to these internal ratings so as to ensure economically meaningful and reasonably consistent capital treatment of similar risks across banks. this is an extremely difficult undertaking, and its success will require unprecedented collaboration between – and among – supervisors and the banking industry. the framework it is, i believe, important to reiterate my earlier comment that bank supervision and regulation – especially capital regulation – are necessarily dynamic and evolutionary. we are striving for a framework whose underlying goals and broad strategies can remain relatively fixed, but within which changes in application can be made as both bankers and supervisors learn more, as banking practices change, and as individual banks grow and change their operations and risk - control techniques. operationally, this means that we should not view innovations in supervision and regulation as one - off events. rather, the underlying framework needs to be flexible and to embody a

eliminated fiscal and external deficits and improved competitiveness. in more detail : • the general government balance turned into a surplus of 0. 5 percent of gdp in 2016 from a deficit of 15. 1 percent of gdp in 2009. the primary surplus ( i. e., the general government balance net of interest payments ) showed a surplus of 3. 8 percent of gdp in 2016 ( programme definition ), from a deficit of 10. 0 percent of gdp in 2009. • the current account deficit has fallen by 15 percentage points of gdp since the beginning of the crisis, with the current account effectively being in balance over the last three years. • labour cost competitiveness has been fully restored and price competitiveness has recorded substantial gains since 2009. • the reforms implemented cover the pension system, the health system, labour market, product market, the business environment, public administration, the tax system, and the 1 / 7 bis central bankers'speeches budgetary framework. as a consequence, openness has improved substantially and the economy has started to rebalance towards tradable, export - oriented sectors. • the share of total exports in gdp increased from 19. 0 % in 2009 to 33. 1 % in januaryseptember 2017. exports of goods and services, excluding the shipping sector, have increased by 47 % in real terms since their trough in 2009, similar to euro area exports. • the share of tradables goods and services in the economy has increased by 10 % relative to non - tradables in terms of real gross value added since 2010. also, relative prices and net profit margins of tradables ’ sectors have increased, facilitating the rebalancing process of the greek economy towards tradable goods and services. t he banking system has been restructured, consolidated and recapitalized, following stringent stress tests along with in - depth asset quality reviews. greek banks are now among the best capitalized in europe. in september 2017 the cet1 ratio came to 17. 1 % ( december 2016 : 16. 9 % ) and the car to 17. 2 % ( december 2016 : 17 % ). moreover, the accumulated provisions cover half of banks ’ total npes, while the other half is covered by the value of the underlying collateral, resulting in an overall coverage ratio of almost 100 %. significant institutional reforms have been implemented, aiming at providing banks with a variety of means of reducing non - performing loans. these reforms, among other things,