risks reflecting the global macroeconomic situation – moderate growth, high unemployment, and low indices reflecting consumer confidence and business confidence. these, of course, also have an effect on the domestic macroeconomic risk, which reflects moderate growth. in contrast, the market risk indices, both in israel and globally, are at low levels, which creates a gap – both in israel and abroad – between the real situation and the investors ’ risk philosophy. this gap is apparently affected by the search for yields in a low interest - rate environment, but it is possible that expectations of an increase in corporate profits that will accompany the recovery also have an effect. bis central bankers ’ speeches a view of the business sector ’ s sources of financing indicates that the trend of a decline in the weight of bank credit and an increase in the weight of domestic nonbank credit – through corporate bonds and recently through direct loans from institutional investors as well – that we witnessed since the beginning of the century continues even after the global crisis of 2008 – 9 ( slide 12 ). this is obviously a positive process, in that it increases and variegates the sources of financing to the business sector, creates competition for the banks and acts to reduce the cost of financing, thereby supporting growth. however, the process is also accompanied by the creation of risks that must be addressed. among other things, these reflect the fact that the nonbank credit market has developed rapidly, while its regulation is developing gradually. during the global crisis, most of the negative impact to the financial system in israel was reflected in this market : yields in the market skyrocketed and issuances froze. in total, more than 100 companies have entered debt restructuring proceedings thus far – representing bonds totaling about nis 40 billion. it is important to emphasize that this number does not represent the scope of the loss absorbed by investors, which will naturally be lower ( slide 13 ). since the global crisis, as a lesson from global developments as well as developments in israel, in order to reduce the risks of a crisis and to reduce the damage of a crisis should one take place, many measures are being taken in the field of regulation that are intended to reinforce the durability of the financial institutions and system. regulations have been updated in the field of corporate governance and risk management at the banks ; the basel iii guidelines have been adopted in the area of capital requirements, and rules in the area of liquidity and leverage will be adopted ; the use of stress tests to identify risks in institutions

” in full – which can only be discerned using a magnifying glass. as time goes by, as technology advances, electronic means of payment become more and more sophisticated : from manually swiped credit cards through magnetized cards, webbased payments, mobile payments, proximity cards, and electronic wallets, which include a variety of payment means and smart cards. smart cards will enable customers to carry out any type of transaction currently conducted using debit cards – immediate debits, deferred debits, credit transactions and cash withdrawals, and provide them with new advantages. the use of such cards, which is expected to begin in israel in the next few years, will require entering a code into a terminal located at the business, thus reducing the use of stolen or loss cards. israeli innovation and creativity have not bypassed the field of payment means, which is evident from the large number of mobile payment and mobile wallet applications – some of which are becoming more popular both in israel and abroad. some of the electronic payment means yet to be widely used in israel are already being developed or used in various countries, such as smart cards, proximity cards, payments using biometric identification, electronic wallets and digital checks. we are at the height of a technological revolution in means of payment, which is expected to make them more user friendly, more convenient, more widely available and safer to use. it is, of course, highly significant that this process be appropriately regulated, ensuring that its advantages are fully realized and possible risks are minimized. bis central bankers ’ speeches