currency payments is limited by the size of its reserves or the willingness of the central bank issuing the international currency in question to help. although the provision of foreign currency liquidity through reserves was clearly important during the crisis, most studies seem to support the conclusion that the dollar swap lines made the crucial difference, especially when they were uncapped vis - a - vis some key central banks. to a significant degree, this was the domestic lolr process replicated at the international level. does this mean that we have the solution? at the conceptual level, yes, but at the practical level, maybe not. the swap lines are not at present a permanent and a reliable feature of the international monetary system ; for instance, they have been strongly challenged in political discussion in the us. furthermore, there are important unresolved governance issues, such as who should decide which countries get a swap line and which do not. it is thus an important item on the reform agenda to clarify the extent to which standing foreign currency lolr facilities for solvent cross - border banks can be set up. in the meantime, cross - border banking will retreat because of this risk, and smaller countries in particular will be more reluctant to provide a home base for cross - border banks. bis central bankers ’ speeches let me now move to the eu / eea level. here the main fault line is the contradiction between, on the one hand, the area - wide permission to operate based on home licensing and a common regulatory framework ( the european passport ) and, on the other hand, national supervision, a national safety net of deposit insurance and lolr, and national crisis management and resolution regimes. the underlying principle is the same as in many other areas of the eu : an equal and harmonious competitive position throughout the area. in that ideal world, the location of headquarters and the size of a banking system relative to that of a country should not matter. the crisis revealed that this framework is deeply flawed. first, it ignores the fx liquidity risk that i discussed earlier. banks from small countries with independent currencies are more exposed to this risk than, for instance, banks within the euro are. second, country size and bank size relative to countries matter for the viability of bailout options. to take an example, the balance sheets of iceland ’ s three cross - border banks were 10 times iceland ’ s gdp, and 2 / 3 denominated in foreign currencies. nationalising them or guaranteeing their debt

weakening of the dinar would support the competitiveness of the 4 / 6 bis central bankers'speeches domestic economy, this would be only in the short run. in the medium run we would face the negative effects of the depreciation of the dinar manifesting as : a more durable inflation growth ; a fall in business, investment and consumer confidence ; an increase in euro loan repayment instalments for households and businesses ; in a nutshell, in the medium term the effects would be measured by the weakening of all key economic indicators in the country – which we had an opportunity to see in several instances before 2012. it is a fact that several episodes of considerable weakening of the dinar from 2000 to 2012 didn ’ t help economic growth, while it did have negative implications for business and investment confidence, inflation, inflation expectations, the financial sector and overall economic activity. third, it is also a fact that serbian export of goods and services increased from eur 11. 5 bn in 2012 to eur 28. 6 bn in 2021, i. e. by 150 % over the span of nine years. at the same time, export to import cover ratio rose by around 20 pp, to 86. 4 %. because of all of this, we shall not change the policies that yield results. in the long run, export is stimulated in the way serbia has been doing it for years already – through stability, building of export capacities and integration into global production and service chains. ( slide 9 ) the fifth and the last topic relates to our expectations for the coming period. 1. first, under our central projection published in the february inflation report, y - o - y inflation will strike a downward trajectory as of the second quarter and return within the target tolerance band by year - end. the risks from the international environment are heightened in the short term, but even in conditions of heightened uncertainty, the downward trajectory of inflation this year is under no threat. in the current conditions in the global market, this would not be with high degree of certanty without a comprehensive programme aimed at protecting the population and economy from the effects that may occur on the supply side, as well as from the price effects, which in serbia, i repeat, has been adopted and is already being implemented. 2. second, medium - term growth is projected in the range of 4 – 5 %. this projection is supported significantly by the projects in railway, passenger, energy and utility infrastructure and their indirect effects on gdp