by more than 80 bp over the last year, rising to 12. 6 % at end - 2015 for spanish banks as a whole, comfortably exceeding the regulatory minimum. the cooperative sector in spain let me now turn to the cooperative sector. i should begin by stressing that, although the relative weight of cooperative banks in spain is modest compared with that of commercial banks, the cooperative sector plays a significant role in financing the productive system in various industries and, therefore, in activity and employment generation. the sector ’ s total consolidated assets amounted in december 2015 to €131 billion. in comparative terms, they account for 3. 6 % of spanish deposit institutions ’ total consolidated assets. we need not recall that one of our hosts, cajamar, is a major component of the sector, accounting for slightly more than 30 % of co - operatives ’ overall assets. co - operatives are for the most part small institutions, rooted in the territory where they operate. focusing on business in spain, with individual data, the cooperative sector has more than 18, 000 employees distributed across more than 4, 300 offices. on december 2015 data, cooperatives employ more than 9 % of workers in the banking sector in spain, and they account for 14 % of the offices operating on national territory. as regards the composition of the sector ’ s balance sheet, of note on the liabilities side is the significance of private - sector deposits, equivalent to over 70 % of total assets ( almost 20 pp more than for total deposit institutions ). on the asset side, the differences with the rest of the banking sector are fewer. however, the proportion of credit to the private sector is slightly higher for the cooperative sector. the proportion of own funds for cooperatives ( 7. 2 % in december 2015 ) is also slightly higher than that of the banking sector as a whole. focusing on business in spain, the cooperative sector provides around 7 % of the total volume of credit used to finance non - financial corporations and households, in particular house purchases. the sector ’ s npl ratio stood at 11. 2 % in december 2015, having fallen by almost 1. 5 pp over the course of the year. in the analysis by sector, the household npl ratio stands at 5 %, and at 20. 4 % in the case of non - financial corporations. notably, on one hand, this ratio has fallen by more than 3 pp in 2015 ; and, on the other, if construction and real estate development companies are excluded,

speeches reserve bank ’ s philosophy on management of forex risk 19. reserve bank has always advocated for better management of forex risks by the corporates. from making available different kinds of instruments to providing enabling conditions / regulations to effectively use such instruments in managing the foreign exchange risk, reserve bank has always striven to provide corporates with various choices. 20. further, reserve bank has been following a consultative approach while formulating new guidelines or amending old ones. the comments / suggestions received from various stakeholders are analysed and incorporated in to the guidelines if found suitable. 21. reserve bank believes that corporates should be concentrating more on their core business to generate returns rather than looking to generate alpha from diversifying into trading in forex markets. as my fellow senior colleague, mr v k sharma, executive director aptly observed, and i quote, “ risk management is not about eliminating, or which is the same thing as completely hedging risk, but about first determining, like one ’ s pain threshold, risk tolerance threshold and then aligning an entity ’ s existing risk, be it currency, interest rate or commodity price risk, with its risk tolerance threshold. having said that it would also be in order to have a sense of how risk itself is defined and measured. risk is uncertainty of future outcomes such as cash flows. in financial theory and practice, it is typically measured by annualised standard deviation of a time - series of percentage changes in asset prices. while courting financial risks in pursuit of financial returns is the staple and dharma of banking and finance industry, it is not so for industrial and manufacturing businesses! the staple and dharma of business and industry is courting their normal core business risks in pursuit of delivering a market - competitive return on equity to shareholders ”. there cannot be a better advice for the corporates trying to come to grips with the “ new normal ” in the changed financial market realities. 22. it is therefore not only in the interest of market stability but also corporate balance sheet that the derivative products are used more responsibly for risk containment, more so on account of the increased volatility in the markets, so that they serve the purpose they were designed for. 23. related to hedging from the accounting aspect is the issue of marking to market all the outstanding derivative contracts i. e. recording the value of outstanding financial contracts at fair value. in recent times, given the volatility of rupee much press coverage has been directed towards