constraints for smes have been higher. 3 ] matching credit supply and demand we are already seeing signs in the euro area that a rebalancing towards capital market financing is taking place : as bank credit to corporates has fallen, it has been approximately matched by issuance of corporate bonds. it would nonetheless be naive to expect this transition towards a new financing mix to occur seamlessly. while on aggregate, euro area credit supply might be sufficient to meet credit demand, i see two factors that might lead to an imperfect match between supply and demand for certain firms. they are the location of those firms and their size. see for example arcand, jean - louis, enrico berkes, and ugo panizza ( 2012 ). “ too much finance? ” imf working paper no. 12 / 161, or manganelli, simone, and alex popov ( 2013 ). “ financial dependence, global growth opportunities, and growth revisited. ” economics letters, 120 ( 1 ), 123 – 125. oecd ( 2014 ). “ the role of the financial sector for economic growth in oecd and g20 countries, ” internal paper prepared for the economic policy committee. ryan, r., o ’ toole, c. and mccann, f. ( 2014 ), “ does bank market power affect sme financing constraints ”, journal of banking and finance, january. bis central bankers ’ speeches location in terms of location, the cost of and access to finance in the euro area remains strongly based on national conditions. for example, the average cost of borrowing for non - financial firms in portugal is more than 5 % per year, whereas the equivalent for french firms is around 2 % per year. one would imagine in this situation that a portuguese firm would seek out a french bank, but the euro area banking market does not facilitate such arbitrage. direct cross - border loans to firms account for just 7. 5 % of total loans to firms. and local affiliates of foreign banks represent on average only around 20 % of national markets, and much less in larger countries. thus, firms depend heavily on the health of their domestic banks. moreover, while corporate bond issuance has partially substituted for bank lending, it is strongly concentrated in non - distressed countries where there has been no decrease in the net flow of bank loans. the net issuance of debt securities, quoted shares and bank loans in non - distressed countries was plus €66 billion in 2013, whereas it

com / en - us / research / wpcontent / uploads / 2016 / 02 / whyfromnigeria. pdf. ( “ a less outlandish wording that did not mention nigeria would almost certainly gather more total responses and more viable responses, but would yield lower overall profit. recall, that viability requires that the scammer actually extract money from the victim : those who are fooled for a while, but then figure it out, or who balk at the last hurdle are precisely the expensive false positives that the scammer must deter. ” ) brian krebs, “ the year targeted phishing went mainstream, ” krebs on security, ( august 18, 2018 ), https : / / krebsonsecurity. com / 2018 / 08 / the - year - targeted - phishing - went - mainstream /. - 9information, on the other. to some degree, the opacity of ai products can be seen as an extension of this balancing. but ai can introduce additional complexity because many ai tools and models develop analysis, arrive at conclusions, or recommend decisions that may be hard to explain. for instance, some ai approaches are able to identify patterns that were previously unidentified and are intuitively quite hard to grasp. depending on what algorithms are used, it is possible that no one, including the algorithm ’ s creators, can easily explain why the model generated the results that it did. the challenge of explainability can translate into a higher level of uncertainty about the suitability of an ai approach, all else equal. so how does, or even can, a firm assess the use of an approach it might not fully understand? to a large degree, this will depend on the capacity in which ai is used and the risks presented. one area where the risks may be particularly acute is the consumer space generally, and consumer lending in particular, where transparency is integral to avoiding discrimination and other unfair outcomes, as well as meeting disclosure obligations. 19 let me turn briefly to this topic. the potential for the application of ai tools to result in new benefits to consumers is garnering a lot of attention. the opportunity to access services through innovative channels or processes can be a potent way to advance financial inclusion. 20 consider, for instance, consumer credit scoring. there are longstanding and well - documented concerns that many consumers are in a 2017 request for public comment, the bureau of consumer financial protection noted that alternative modeling techniques may