barriers. in the 1970s and 1980s the solution of governments facing industries in difficulties was to provide financial support or subsidies thereby prolonging the pain of restructuring the production. fortunately this approach has given way to a more dynamic reasoning where the proposed political answer to the challenges posed by globalization to the western economies such as denmark today is to rely heavily on the education aspect. education is now perceived as the best way to ensure the crucial movement up the value chain ( slide 19 ). this is obvious in the eus approach which is called the lisbon strategy to promote education and research as well as multiple strategies from danish governments to counteract the negative effects from globalization. this includes the latest proposal from the danish government. in this race to the top on education the danish performance has been questioned in the debate. with a free education system and high marginal taxes one of the possible stumbling stones of the education effort is brain drain meaning the emigration of highly skilled individuals ( slide 20 ). the studies on the extent of this problem suggest that the scope is rather small. denmark has experienced a small net emigration of highly educated labour each year and generally the numbers are not giving cause for concern. in some groups notably phd's and masters of natural and social sciences the share of emigration is larger and the return probability is lower. the return rate is in general around eighty percent suggesting that the decision to go abroad and come home again is affected by a long range of factors other than purely economical ones. slide 1 slide 2 slide 3 slide 4 slide 5 slide 6 slide 7 slide 8 slide 9 slide 10 slide 11 slide 12 slide 13 slide 14 slide 15 slide 16 slide 17 slide 18 slide 19 slide 20

an effective resolution framework. these tools primarily facilitate optimal structuring of credit facilities, ability to change ownership / management, and help restructuring of stressed assets. a framework was put in place for greater transparency in sale of stressed assets by banks with a view to ensuring the sale is at market determined prices. 2 / 4 bis central bankers'speeches 14. the system of ‘ prompt corrective action ’ ( pca ) under which specific regulatory actions are taken by rbi if banks breach certain trigger points has recently been revised. this ensures timely supervisory action in case of problem banks following a rule based approach. the pca ’ s objective and design is to strengthen a bank ’ s fundamentals and imbue confidence. 15. weak credit discipline in banks, right from the appraisal to sanction stage, is one of the main bank specific factors in the build - up of stressed assets. the risk based supervisory process of the reserve bank keeps flagging some of these risks which are taken up with the institutions concerned for remedy. however, in order to ensure an effective enforcement action on the specific violations / breaches, a separate enforcement department has been established. the mandate of the department is to develop a rule based, consistent framework to deal with breaches of law, rules and directions. effective deterrence enforced through such actions is expected to contribute to strengthening the credit culture overall. 16. during the annual financial inspections ( afis ) of the banks, it is usually observed that there is a divergence between the npas and provisions declared by the banks and those assessed during the afi process. this has adverse implications on timely recognition of actual risk, trustworthiness and transparency of books of accounts, management effectiveness, etc. accordingly, in order to address this asymmetry, disclosure requirements have been put in place – banks have to disclose in their annual accounts the details of such divergences where these exceed specified thresholds. 17. the recent decision by sebi that requires listed entities to disclose defaults on, inter alia, bank loans within one working day can make a huge difference in the credit culture. if my understanding is correct : effectively, a one - day default by bank debtors will result in all bank loans to the debtor entity being generally classified as ‘ default ’ by the rating agencies, with attendant implications for risk weights on such exposures and capital requirements by the banking system. iii. institutional measures central repository of information on large credits ( crilc ) 18. setting