, and the krone weakened considerably. when speculators withdrew, daily fluctuations increased and hedging against exchange rate volatility became more expensive. on christmas eve, the krone fell to its lowest level in ten years. we are now in the deepest downturn in oecd countries in the postwar period. the us economy may already have shrunk by around 2½ per cent since the crisis erupted in september. output has fallen at the same rate in many european countries, and perhaps by twice that rate in japan and korea. for a long period there were hopes that growth in china and other emerging market economies would hold up. but they are also now severely affected by the crisis. output is also contracting in norway, but so far probably somewhat less so than abroad. what is happening now is more than a normal fluctuation in the business cycle. the world is facing a crisis of confidence, with faltering faith in the future and a loss of confidence in banks, counterparties and contractual partners. the authorities have taken extraordinary action, as in a state of emergency, deploying a wide range of established and new policy instruments. five different sets of measures have been implemented : first, central banks have supplied liquidity to banks on a much larger scale than usual and providing loans with longer maturities. central banks are also providing foreign currency loans to their banks. second, key rates have been aggressively cut. the us entered the downturn first and had already reduced the key rate in early autumn 2007. and as the crisis developed, the federal reserve continued to lower its key rate. here in europe, key rates rose up to summer 2008 before being lowered substantially from october. third, credit policy instruments have been introduced. several countries are guaranteeing loans to banks. the federal reserve is buying mortgage - backed securities, asset - backed securities collateralised by student loans, credit card loans and loans to small businesses, as well as commercial paper issued directly by large businesses, a measure the central banks in japan and the uk also intend to implement. the uk government has announced that they will guarantee loans to small and medium - sized firms. fourth, the authorities in a number of countries felt compelled to supply risk capital to banks. some governments have assumed ownership of financial institutions. in the uk, the government is now a majority stakeholder in the royal bank of scotland and owns over 40 per cent of lloyds. in germany, the government is increasing its stake in commerzbank

, there are some concerns to us at the bank of ghana like the persistently high level of npl ratios compared to other peer countries. as at june 2013, the npl ratio was 12. 8, down from 13. 2 in june 2012. although the rates are on the downward trend, they are still high and we are taking steps to encourage banks to write - off long outstanding “ loss ” accounts with 100 % provisioning that tend to overstate the true npl level. for instance, when we account for the loss category, the npl ratio as at june 2013, declined to 4. 7 which compares favourably with prevailing npl levels in other peer countries. 11. on the other hand, there is also the need to apply strict provisioning rules on overdraft facilities which are more prone to “ ever - greening ” than ordinary term loans. other issues are : the build - up of unclaimed deposit balances or dormant accounts on banks ’ books ; concentration risk on both sides of the balance sheet – large loan exposures and reliance on large deposits ; the need for transparent regulatory issuances on such issues as mergers & acquisitions, internal controls, and external auditors ; and finally the need to update manual of accounts and reposting requirements. 12. the bank of ghana took another major step to enhance transparency in the setting of lending rates in the industry. the new base rate model which seeks to ensure transparency and uniformity in loan pricing within the banking industry, became operational in july 2013. as per the directive, banks have fully complied with the new framework and there are positive indications that on the average, base rates have declined by about 3 pct in the banking industry. this new initiative, together with the credit bureau system and the collateral registry should help improve the environment for lending and further help lower npls in the banking industry. 13. mr. chairman, permit me to touch on a matter that is sensitive to both the industry players and the bank of ghana that is capital requirements. developments in the macroeconomic front have necessitated the need for the bank of ghana to review the minimum capital requirements for new industry entrants. in this regard, the minimum paid - capital for major banks have been revised from gh¢60 million to gh¢120. 0 million while that of nbfis increases from gh¢7. 0 million to gh¢15. 0 million. that of the rural banks have been upped to