##k now the one - stop platform for both individuals and smes to restructure debt and obtain financial advice. that said, it is equally important for policymakers to ensure that mechanisms for swift npl resolution remain appropriate, not only to prevent an accumulation of legacy npls in the banking sector but also to provide borrowers impacted by this pandemic an opportunity to bounce back once the crisis abates. such a balanced approach helps to preserve the value and productive capacity of borrowers in turn limiting long - term damage to the economy. for malaysia, work is underway to strengthen legislation which will expand the coverage of businesses that can benefit from court - sanctioned recovery mechanisms. this will help flatten the insolvency curve and avoid more permanent scarring, if npl cases were to spike. admittedly, this is an area where there are opportunities to do more and one where all of us can potentially learn from each other. concluding remarks let me conclude. looking ahead, we are cautiously optimistic that the tide may be finally turning in this crisis. however, we certainly can ’ t conclude that the covid - 19 pandemic is firmly behind us. we humbly admit that the virus has wrong footed us several times. the hallmark of good policymakers is to, as the saying goes, “ hope for the best, but prepare for the worst ”. our challenges may differ, but i believe for all of us attending this webinar, our end goal is the same – to successfully navigate the exit from this pandemic and effectively manage any potential surge in npls such that our financial sectors are able to continue to lend support to the recovery process while mitigating more permanent economic scarring. on that note, i wish everyone a day of engaging discussions and fruitful learning. 3 / 3 bis central bankers'speeches

nils bernstein : challenges ahead for the danish economy speech by mr nils bernstein, governor of the national bank of denmark, at the annual meeting of the danish bankers association, copenhagen, 3 december 2012. * * * the sovereign debt crisis is still leaving its mark on the world economy, especially in the euro area. while the us economy seems to be in a moderate upswing, the euro area economy is shrinking. gdp growth has been negative in the last two quarters and the outlook for the 4th quarter is not bright. even the german economy, which until recently had been less severely affected by the problems in southern europe, seems to be slowing down. the swedish economy is holding its ground, but is also seeing lower growth. the international organisations all predict that the world economy will pick up only gradually in 2013, and growth estimates have generally been adjusted downwards, particularly for the euro area. although the usa seems to be faring a little better, its unsustainable budget deficit presents serious challenges. so far, political disagreement between the president and congress has stood in the way of finding an effective solution to the problem. the risk is that the financial markets at some point begin to respond, as seen in other highly indebted countries. the usa is unique in a number of respects, such as the size of the economy, but all the same, the economic fundamentals still apply. the development in the usa will have a knock - on effect on the rest of the world. in the summer of 2011, when the us debt ceiling was raised, a compromise was reached between the democrats and republicans, meaning that a number of summary budget reductions will be introduced at the turn of the year, and at the same time a number of tax cuts will expire. the potential tightening accounts for 4 per cent of gdp and, if effected, it will plunge the us economy into a recession. negotiations to avoid this “ fiscal cliff ” are underway. it is scarcely possible to find a solution without addressing the long - term problems linked mainly to demographic change. the financial markets constantly reflect the changing prospects of reaching a compromise. in some of the most heavily indebted countries, unemployment has reached alarming levels. public opinion often ascribes this to the consolidation of public finances. but actually, there is no real alternative to consolidation. sustainable public finances are a condition for reducing the rate of interest on government debt to an acceptable level. sovereign default is not an attractive alternative. and it will certainly not