financial literacy. we also consider accessibility of financial services to be an important condition for proper functioning of the financial market. another field of our concern is the development of the national payment system. in less than a year after the decision was taken, a processing and clearing centre was created and interrussian transactions of international payment systems were transferred there. currently, we are actively developing our own payment card. in conclusion i would like to say that the integration of crimea into the russian financial and payment system became an important part of our job last year. we implemented accelerated transfer of settlements from hryvnias into rubles. initially, in compliance with the law, we had to complete this process by 1 january 2015, but it became evident that such a long period of circulation of two currencies is unreasonable. as a result the transition was implemented in two months. as many as 530 branches of russian banks have been opened on the territory of crimea and are ready to offer their customers a complete range of services. cash circulation has been arranged and the necessary amount of coins and banknotes has been delivered. a few words about internal changes in the bank of russia. in 2014, the organisational structure of the bank of russia underwent serious changes aimed at increasing our efficiency and optimising the workforce. the improvement of the bank of russia territorial structure initiated in 2014 was completed in january 2015. as many as 79 main branches and national banks were transformed into seven main branches with subordinated divisions. due to the accession of the republic of crimea and bis central bankers ’ speeches the federal city of sevastopol to the russian federation, in 2014 a division for the republic of crimea and a division for the city of sevastopol were established. resulting from the structural optimisation held in 2014, the bank of russia cut 3, 500 jobs or 5. 3 % and its workforce amounted to 61, 800 employees as of early 2015. i would like to note that the number of employees was reduced, while the bank of russia obtained vast powers as a megaregulator. however, we will continue reducing the workforce. in conclusion i would like to say that the bank of russia faces challenging tasks in a challenging period in the country ’ s history. we completely assume our responsibility. i am convinced that there are all the prerequisites to put the economy on the track of sustainable growth while ensuring the necessary macroeconomic and financial stability in joining our efforts. thank you very much for your attention. bis

regulation and supervision will be more focused on development and stimulation. 5 / 11 bis central bankers'speeches by introducing proportional regulation, we envision that it will stabilise small banks and enhance the solvency of their business models. i would like to highlight that while proportional regulation limits the risks that small banks can take on, but they will be subject to simpler regulation. this will ensure a fairer competitive environment. the second innovation we also announced a year ago here at the congress is the transition to a new bank resolution mechanism and the creation of a fund for banking sector consolidation. we are now ready, both from a legal point of view and in terms of management, to apply the new bank resolution mechanism. we hope that, as the market progressively clears and there is improved early detection of problems, there will be more cases where it is more beneficial to try to recover banks ’ solvency than simply revoke their license. moreover, the new bank resolution mechanism itself could promote the development of competition in the banking sector : consolidation will allow relatively large banks to return to the market. we are currently observing the lowest competition rate among the largest banks. thus, we have made progress in two of the three major objectives we announced at last year ’ s congress. the third objective we spoke about last year was establishing qualitative supervision over financial groups – we have prepared a draft bill that is being discussed in the government. we hope this innovation will be introduced next year. i would now like to address the objectives that we are yet to complete. the most pressing problem is lending to business owners. the standard n25 restricting financing of one ’ s own projects was introduced this year but is still only applied in a preferential mode. lending to owners is dangerous for two reasons. first, the bank will turn a blind eye to risks linked to its own company when issuing it a loan i. e. the risk of non - return. second, our practice has shown that if the owner ’ s project really experiences difficulties the last place it returns money is the affiliated bank. these are not marketable loans but loans extended by unwritten rules. banks cannot refinance or resell them. in the end, this is the cause of bankruptcy for many banks. it is one of the factors that led to the collapse of relatively large banks, whose licenses we revoked. we want the banking community to know that our intentions in this field are serious and we will continue to take a tighter stance. therefore, i