supervisors. and this european aspect is crucial. as european supervisors, we can take a higher vantage point ; we can see and act across borders. as a national supervisor at the federal financial supervisory authority and the deutsche bundesbank, i supervised 20 large banks – all from germany. in the ssm, we supervise around 120 large banks from across the euro area. you can imagine the greater depth of insight that we gain. we benchmark all these banks against their peers ; by comparing them we can more easily spot new trends, new risks and new vulnerabilities. we can clearly distinguish the nodes and links of the european banking sector. and see what works and what doesn ’ t – both on the banking and the supervision side. let me give you just one example. it ’ s no secret that european banks have a profitability problem. in analysing this problem, we benefited a great deal from our cross - country perspective. we could identify a number of banks that constantly outperform their peers, and we could assess the 1 / 6 bis central bankers'speeches factors behind their success. this would not have been possible if we had looked only at a national sample of banks. but now that i have lavishly praised the concept of european banking supervision, let ’ s turn to the banks and the risks they face. risks from the outside – the economy, geopolitics and technology and there are plenty of risks. plenty of risks that interact in complicated ways. so, for brevity ’ s sake, i won ’ t address all the risks that exist but will focus on just a few. i will start with one of the issues that has, unfortunately, become a hallmark of the euro area banking sector : nonperforming loans, or npls. in early 2015, significant institutions in the euro area held almost €1 trillion worth of bad loans on their balance sheets and the aggregate npl ratio stood at 7. 5 % on average. this average, however, masks big differences : npl ratios ranged from around 1. 5 % in luxembourg to more than 45 % in greece. the banks therefore had a heavy burden to carry. after all, npls require special care and so tie up management resources. they also pose a higher risk of losses, require provisions, tie up capital and affect lending. their effect on lending is what makes npls a problem that reaches beyond the banks. the euro area economy mostly relies on banks as a source of credit

haruhiko kuroda : asia ’ s contribution to the global economy – prospects and challenges for the transition to domestic demand - led growth speech by mr haruhiko kuroda, governor of the bank of japan, at the 4th bank of thailand policy forum, bangkok, 24 july 2014. * 1. * * introduction governor, distinguished guests, ladies and gentlemen, thank you for inviting me to the 4th bank of thailand policy forum. it is a great honor to address such distinguished guests who are leading the thai economy. i would like to extend my heartfelt gratitude to governor prasarn trairatvorakul for giving me this valuable opportunity. thailand was the first southeast asian nation to establish diplomatic relations with japan, and the year 2017 will mark the 130th anniversary of this significant event. the two countries have been engaged in active cultural exchange at least since the ayutthaya dynasty. in more recent years, our two nations have established close ties as important economic partners, providing support to each other in times of difficulty. the bank of japan received generous donations from the bank of thailand and the bank ’ s staff to help the victims of the great east japan earthquake in 2011. all of us at the bank of japan remain deeply grateful for this kindness. i learned about these donations immediately after i became governor of the bank and felt deep reverence for and strong gratitude to our friends in thailand. i would like to take this opportunity to renew our thanks. thailand is a key base in southeast asia for the economic activities of japanese firms, of which more than 1, 500 are members of the japanese chamber of commerce in bangkok. last year, japan was thailand ’ s largest importing trade partner, and its third largest export destination. the very close ties between the two countries are shown in the results of a survey conducted by the ministry of foreign affairs of japan, where 97 percent of the people in thailand regarded japan as a friendly nation. today, i would like to share with you my views on asia ’ s contribution to global economy. these views are based on my 16 months ’ experience as governor of the bank of japan, and my 8 years as president of the asian development bank before that. i. a change in growth model for the asian economies even when growth in the major advanced economies slowed considerably following the global financial crisis, the asian economies continued to register solid growth. moreover, the region ’ s economies have contributed significantly to the recovery and subsequent growth of the global economy.