yaron amir : competition in the banking system speech by mr yaron amir, governor of the bank of israel, at the banking supervision department conference on competition in the banking system, jerusalem, 2 april 2019. * * * summary : some of the significant measures and reforms aimed at enhancing competition have already come to fruition, and others are in the process of coming to fruition. there are additional supporting processes that are required now, such as the development and application of financial and technological instruments, and the deepening of the capital market, which will contribute to competition in the credit market and increased consumer well - being as they advance. these processes are becoming possible mainly in view of the development and application of advanced technologies that were not available until just recently. removing information gaps, leveraging existing information, and utilizing technological ability for informed analysis and learning in real time about the credit market will enable more correct pricing that is more in line with the risk to various layers of the credit market — households and small and medium businesses — thereby contributing to development of the market. the market must be developed while managing risks and developing proper regulation, in order to make sure that, despite the risks, the benefit from these processes will make them worthwhile. two financial instruments that should be advanced in order to make the capital market more sophisticated and deeper, and which will contribute to the continuing increase in competition, are securitization and long - term interest rate derivatives. * * * good morning. first, i would like to congratulate the banking supervision department on this conference, and welcome the honored guests. the issue of competition in the financial system is one that occupies many people in israel and abroad. advancing competition has been a top priority of the public and of the bank of israel in recent years, and for good reason. advancing competition in the financial system, when done properly, has many positive effects on all entities in the economy, first and foremost the broad public. today, i would like to discuss various aspects that can enhance competition in this market, thereby increasing consumer well - being and economic growth. some of the significant measures and reforms aimed at enhancing competition have already come to fruition, and we are already enjoying the results. others are in the process of coming to fruition. and there are additional supporting measures that are now required, such as the development and application of technological and financial instruments, and deepening the capital market. as these are advanced into the future, they will in turn contribute to

, 3 per cent in 2012, and 3, 9 per cent in 2013. there are still significant risks to the global environment, but the intensity and immediacy of these risks may have been reduced somewhat with the recent agreement on the greek bail - out which has helped to prevent a disorderly default. this agreement is expected to allow for greece to roll - over its debt that is maturing this month. it would be premature to think that the european crisis has been resolved as there are a number of interrelated and mutually reinforcing dimensions which mean that uncertainty remains. although the risks from the sovereign debt crisis appear to have been reduced for the meantime, questions about the sustainability of the solution persist, particularly in the light of the fact that the european authorities have emphasised that the greek bail - out model is not a precedent. the portuguese economy is also under stress, and we could still see a repetition of the greek crisis being played out there in the coming months. in the absence of a clear commitment to deal with a possible portuguese crisis, the risk of contagion to other more systemically important economies, such as italy and spain, will increase. although some of the peripheral european countries are relatively small, they have a combined bis central bankers ’ speeches sovereign debt of around us $ 1 trillion, with a significant proportion being held by european banks. the actions to resolve the greek debt problem have involved significant losses to private sector bond - holders, many of which are european banks. in terms of the agreement, bond holders will accept losses in excess of 70 per cent of the value of the debt. partly as a consequence of these developments, european banks are now undercapitalised, with estimates ranging between us $ 300 billion and us $ 400 billion. this has resulted in significant deleveraging by european banks, with indications of them selling assets in order to achieve their required ratios. this credit crunch in europe is being exacerbated by the need to meet new capital requirements of raising the tier 1 capital asset ratio to 9 per cent by june 2012. there are concerns that european bank lending could decline by around us $ 3 trillion over the next 18 months. the interbank market is also dysfunctional in europe, reflecting the lack of trust between banks. the ecb has attempted to alleviate the situation with the establishment of the long term refinancing operation ( ltro ) facility, which has to date granted an estimated us $ 1, 35 trillion in loans to banks at