stability. further to this, the issuer country ’ s economic size and centrality in regional or global production and trade networks is an important driver of demand for its currency at the international level, while capital account openness and the consequent currency ’ s convertibility, as well as the depth of domestic financial markets, provide further assurance to global investors. considerable progress has been made in several relevant fronts towards the internationalization of china ’ s renminbi over the last years. its growing use as a medium of exchange and unit of account is evident. the renminbi ’ s participation in global payments has increased from virtually nil in 2010 to slightly less than 2 percent in early 2017, and a similar pattern is observed in the share of china ’ s total international trade that is settled in its own currency. 2 also, the most recent bis triennial survey on foreign exchange turnover, 3 shows that the renminbi was last year the world ’ s eighth most actively traded currency and the first among emerging market economies, after having nearly doubled its share in all foreign exchange transactions over the course of three years. 4 significant progress has also been achieved in enhancing the renminbi ’ s use as a store of value by central banks and monetary authorities. the latest release of the imf ’ s currency composition of official foreign exchange reserves ( cofer ) survey includes specific data for this currency for the first time since records exist. according to this information, albeit low at levels slightly over 1 percent as of the end of 2016, the renminbi ’ s share in the world ’ s total allocated international reserves is not far from other, more established reserve currencies such as the australian and canadian dollars ( 1. 9 and 2 percent, respectively ), and far above that of the swiss franc ( 0. 2 percent ). 5 as noted above, these developments respond to a significant extent to china ’ s increased importance in the global economy. in 2014, china overtook the hongbin, q. et al. ( 2017 ) : “ the rise of the redback vi ”, hsbc global research, april. bank for international settlements ( 2016 ) : “ triennial central bank survey : foreign exchange turnover in april 2016 ”, september. it should be noted, however, that this development came atop a relatively low base, as the renminbi ’ s participation in all foreign exchange transactions increased from 2. 2 % in 2013 to 4 % in 2016 ( note that the sum

to adapt its facilities to support continuous private liquidity creation. bank capitalization since the crisis began, the capital adequacy of banks around the world has been the subject of intense scrutiny. concerns moved quickly from bank exposures to u. s. subprime debt on to structured products of all types as the crisis spread and, finally, to more traditional credits to businesses and households as the recession took hold. concerns about capital adequacy for banks outside canada were made worse by uncertainties caused by accounting standards, valuation methodologies, and a loss of credibility of the basel ii regulatory capital standard. it was not lost on investors that every single financial institution that failed had a capital ratio well above its basel ii regulatory minimum the day before it went down. as a consequence, investors have demanded ever - higher capital ratios from all banks, creating a dynamic that has exacerbated the recession. in this context, canadian institutions have benefited from several factors : high initial capitalization ( minimums set by the office of the superintendent of financial institutions are well above the basel threshold ), high - quality capital ( with one of the highest proportions of common equity ), the clarity provided by a simple leverage cap, low exposure to structured products, and clear valuation and disclosure standards ( including rapid implementation of the financial stability forum's enhanced disclosure guidance of april 2008 ) ( chart 6 ). writedowns by canadian banks have been relatively moderate to date, reflecting their conservative lending practices and low exposure to highly impaired asset - backed products. but canadian banks, as the principal source of finance in our economy, are still exposed to the risk of a marked deterioration in economic conditions, which would depress earnings and generate losses in their household and corporate loan portfolios. in general, this risk is why banks carry high capital buffers. the macroprudential risk is that these capital buffers may not be allowed to play their intended role in absorbing these losses because of market pressures to maintain inordinately high capital ratios. this could force banks to curb balance sheet growth, causing a tightening of credit conditions that would reinforce the negative impact of the economic downturn on the financial system. reflecting the generalized nature of the financial panic, as the crisis unfolded, canadian banks came under pressure from markets to increase their capital ratios. in response, canadian banks raised significant additional, high - quality capital from private sources. the recent improvement in market sentiment has been reinforced by the release in may of the stress -