aspects in the process of setting up the local infrastructure for npl servicing and sales respectively. • the banks ’ internal workout : managing distressed smes. smes are the backbone of the greek economy. the shift of banks towards long - term forbearance measures coupled with the restructuring of viable businesses with appropriate changes in their structure, business model and, if necessary, corporate governance would help stimulate an uptick in economic activity and assist the rebalancing of the greek economy towards export - oriented sectors. ladies and gentlemen, the successful completion of the recapitalization of greek banks in late 2015 has been a decisive first step towards safeguarding financial stability and restoring the intermediation role of banks. the capital adequacy ratio of the greek banking sector stands ( pro forma ) at around 18 % and compares favorably with the average for european union banks. the next milestones for the greek banking sector relate to a return to profitability, a return of deposits through the restoration of depositors ’ confidence and, more importantly, the supply of credit for working capital and investment. undoubtedly, these goals are closely linked to the politically and socially sensitive issue of tackling non - performing exposures, which poses a real challenge for us all. as of september 2015, non - performing exposures stood at €107 billion, representing 43. 6 % of total exposures. hence, the more effective management of non - performing exposures, avoiding the pitfalls of regulatory forbearance or overenforcement alike, will bring about multiple benefits for banks, households, businesses and the society at large. in the process, it will unlock funding to the real economy, bolstering investment and employment. this in turn will enable the greek banking sector to protect and strengthen the productive fabric of the country, while concurrently enhancing its social role. i am confident that today ’ s workshop will show the significant progress that has already been made regarding the development of an appropriate institutional and supervisory framework for a more effective npe management. moreover, it will help to identify the appropriate tools and approaches to this end. i look forward to an exciting discussion and a very fruitful exchange of views. the overwhelming interest of market participants, from greece and abroad, to join this workshop is, i think, a key ingredient for its success. thank you again for being here today. bis central bankers ’ speeches

##balancing and restructuring in the economy. • in the fiscal domain, deficit reduction has been remarkable. between 2009 and 2012, both the general government deficit and the corresponding primary deficit were reduced by 9 percentage points of gdp, while the fall in the structural deficit, at 15 percentage points, was even larger. • regarding the external sector, the current account deficit shrank to 2. 9 % in 2012, down from a peak of almost 15 % of gdp in 2008. more importantly, between 2010 and 2012, greece recovered more than 75 % of the loss in cost competitiveness incurred over the 2001 – 2009 period. bis central bankers ’ speeches a third crucial factor was the success in safeguarding financial stability and confidence in the banking system. today we would not be talking about the prospect of recovery, had the banking system collapsed making greece ’ s exit from the euro area inevitable. this risk was averted. in a period marked by record levels of uncertainty, not one depositor suffered the slightest loss. not only was systemic stability fully preserved, but the groundwork was also laid for a robust banking system. the fourth factor behind the improvement in confidence has been the continued financial support from official lenders, which gives greece time for the structural transformation of its economy to proceed smoothly. this support, provided on favourable terms, is unprecedented by international standards. a fifth factor that also bolsters confidence are the steps being taken towards supplementing the institutional architecture of both the european union and the euro area. the ongoing discussions and decisions taken in this direction have helped to turn the international climate around ; in turn, this affected sentiment in greece favourably. for instance, the adoption of the proposal to move to a banking union will lead to a deepening of economic and monetary union. the announcement of “ outright monetary transactions ” by the eurosystem in september 2012, which by itself helped to restore relatively normal conditions in euro area financial markets, was of particular importance. in conclusion, the risk of collapse has been averted, the possibility of a greek exit from the euro area is now significantly reduced, and confidence is gradually being restored. yet, these encouraging developments leave no room for complacency. 2013 will be another year of recession and unemployment will continue to rise the greek economy is still going through a deep crisis, and the risk of a derailing has not been completely eliminated. in 2012, gdp contracted for the fifth year in a row, bringing the cumulative decline for the five - year period