should be a normal activity in all countries. our study helped to clarify the need for international attention to this topic. consolidation, and especially any resulting increased complexity of financial institutions, appears to have increased both the demand by market participants for and the supply by institutions of information regarding a firm's financial condition. the resulting rise in disclosures has probably improved firm transparency and encouraged market discipline and has thus lowered individual firm risk and perhaps increased financial stability. however, the increased complexity of firms has also made them more opaque, and their increased size has the potential to augment moral hazard. thus, the net effect of consolidation on firm transparency and market discipline is unclear. indeed, we conclude that there appears to be considerable room for improvement in disclosures by financial institutions. our study suggests that both crisis prevention and crisis management could be improved by additional communication and cooperation among central banks, finance ministries, and other financial supervisors, domestically and internationally. indeed, the study strongly supports existing efforts in these areas. in our view, the most important initiatives include proposals to improve the risk sensitivity of the international basel capital accord and bank supervision and efforts aimed at improving market discipline. a critical element of improved risk - based supervision is risk - based capital standards that are tied more closely to economic risk. capital standards provide an anchor for virtually all other supervisory and regulatory actions and can support and improve both supervisory and market discipline. for example, early intervention policies triggered by more accurate capital standards could prove to be important in crisis prevention. payment and settlement systems financial consolidation is affecting the market structures for payment and securities settlement as well as banks'internal systems and procedures for payment and back - office activities. our study concludes that, on balance, financial consolidation has led to a greater concentration of payment and settlement flows among fewer parties. fortunately, our analysis indicates that the greater concentration of payment flows does not appear to have decreased competition in markets for payment and settlement services. however, we suggest that it would be advisable for government authorities to continue to monitor competition in the payment system. in contrast, our work indicates we should closely monitor the risk implications of consolidation in payment and settlement systems. on the one hand, consolidation may help to improve the effectiveness of institutions'credit and liquidity risk controls. for example, increased concentration of payment flows may allow institutions to get a more comprehensive picture of settlement exposures or create a greater ability to net internal payment flows. in addition, central banks have made major efforts over recent decades to contain and reduce systemic

. 4 % of gdp in 2016, bringing down the share of public debt in gdp. this helped achieve the three - year objectives of the fiscal consolidation programme, a year earlier than planned. at the same time, fully covered by foreign direct investment for the second year in a row, the current account deficit declined from 6. 0 % in 2014 to 4. 0 % of gdp in 2016. the influence of external factors and the increased resilience of our economy are also evident in the fx market – through maintenance of relative stability of the dinar exchange rate, which is no longer news for anyone. depreciation pressures, emerging late last and early this year, were in part generated by uncertainties in the international financial market and in part by the seasonally higher demand in foreign currency for the purchase of energy products. in an effort to ease excessive shortterm volatility of the exchange rate, the national bank of serbia intervenes in the fx market and will continue to do so, regardless of the direction of pressures. this means intervening on both sides. in so doing, we do not target any particular level of the exchange rate nor do we intend to influence its trend. ladies and gentlemen, dear colleagues, as is well known to you, the task of the national bank of serbia is to preserve not only price, but financial stability as well. the bank has been striving to strengthen the capacity of banks to resolve the npl issue and to encourage the development of the npl market. as a result of measures taken under the npl resolution strategy, the share of npls in total loans declined significantly – according to preliminary data, from 21. 6 % at end - 2015 to 17. 0 % at end - 2016, their lowest since 2011. this only serves to confirm once again that a systemic, interinstitutional and coordinated approach yields results in this area. while my associates from the directorate for economic research and statistics will present in detail our assessments of macroeconomic developments and our latest projections, i would like to highlight several key messages. the national bank of serbia will continue to keep a close eye on and to assess the developments and trends in the domestic market and the international environment. as so far, we shall use all available instruments to ensure that inflation stays low and stable in the medium run. this is the best way in which a central bank, while at the same time maintaining financial stability, can contribute to economic growth. growth is expected to accelerate