burkhard balz : current challenges in an uncertain world speech ( virtual ) by mr burkhard balz, member of the executive board of the deutsche bundesbank, to mark the inauguration of the bundesbank ’ s new representative in mumbai, 24 march 2022. * * * 1 introduction ladies and gentlemen, i am delighted to be here with you in mumbai today to hail the official inauguration of mr thomas notheis as the bundesbank ’ s representative. at the same time, we say farewell to his predecessor, mr peter kern. sadly, the global pandemic meant that we were unable to celebrate the official handover any earlier. however, it was very important to me to come to mumbai in person as soon as possible as, in a globalised financial world, mutual exchange is more important than ever. and, even though the pandemic has turned us all into experts in videoconferencing and digital work : there is no replacement for direct interaction in person and on - site. i am therefore very pleased that the bundesbank has had its own representative in this city since as long ago as 2010. it is for good reason that, more than ten years ago, we opted to send our representative not to the capital, new delhi, but to mumbai instead. for mumbai is a city of major importance – not only as bollywood, the centre of indian cinema – but also and in particular as india ’ s financial centre. and the reserve bank of india – just like the bundesbank in frankfurt – is based not in the capital city but in the financial hub. to that extent, apart from the population, of course, frankfurt and mumbai are not all that different. 2 economic impact of the coronavirus pandemic allow me now to turn to a topic that, in the last two years, has been a turbulent one not just for both cities but probably nearly every single human being on the planet – the coronavirus pandemic. first and foremost, it has been a health crisis unprecedented in our era. thus far, this viral infection has claimed the lives of roughly six million people. yet the pandemic has also had a massive impact on economic life across the globe. in march and april 2020, the pandemic - related containment measures triggered a global economic slump, the pace of which was without precedent. within the space of just a few weeks, entire economic sectors not only in germany but the world over ground to a

since 2013. during this time, the economy has expanded by an estimated 14 % and the level of gdp is now above its pre - crisis peak. this strong recovery reflects substantial policy efforts at both national and european level, particularly the reforms initiated at the height of the sovereign debt crisis. under the eu financial assistance programme, numerous measures and reforms were undertaken to strengthen the banking system. these included the stress testing and recapitalisation of troubled banks ; the identification of troubled real estate assets and their transfer to sareb ( spain ’ s “ bad bank ” ) ; and the reform of the savings banks. at the same time, actions and reforms at european level, including monetary policy ( longer - term refinancing operations, ltros, asset purchase programme, app ) and the move towards banking union, have ensured liquidity and strengthened confidence in europe ’ s monetary and financial system. financial reforms were accompanied by a series of reforms to labour and product markets and to the public sector. the 2012 labour market reform gave priority to collective bargaining agreements at firm level over those at sectoral or regional level. reforms to product markets, including the law on market unity, have sought to reduce regulatory obstacles to firms ’ growth, although implementation has been challenging. the spanish economy has rebalanced as far as “ flow ” variables are concerned, while “ stock ” imbalances are gradually correcting. banks ’ asset quality and solvency has substantially improved, as reflected in higher capital ratios and a steadily declining ratio of non - performing loans ( npls ). the npl ratio of spanish banks has more than halved from 13. 6 % in 2013 to 6. 4 % now and continues to fall steadily. the banking sector has been able to finance growth with new loans while steadily deleveraging as legacy loans mature. private sector debt has fallen considerably. deleveraging of firms and households is well under way, with debt having declined by almost one - third since 2012. at the same time, the public debt - to - gdp ratio, while remaining very high at almost 100 %, has stabilised. the public 2 / 4 bis central bankers'speeches deficit ratio came down from double - digit levels at the peak of the crisis to 3. 1 % in 2017. more than two million jobs have been created since the end of 2013 and the unemployment rate has fallen from a peak of more than 26 % to 15 %. throughout the recovery, the pace of employment growth has broadly matched that of