2015, following the full - 2014 trading volume of php4. 40 trillion. to where we need to go our numbers will be rather modest by global standards but it cannot be denied that we have indeed come far in the last 15 years. for that, allow me to congratulate all the stakeholders of the philippine capital market. with the applause, one can almost hear people murmur, so let me say it aloud. yes, ladies and gentlemen, there is a “ but ”. we have come this far but there is much that still lies ahead. our rapidly growing economy needs a deep and active domestic debt market more than ever, both to provide the more stable funding for infrastructure and other long - term needs as bis central bankers ’ speeches well as the investment outlets of a quality and variety that meet the diverse requirements of our savers. but it will not come about of its own without our active collaboration to build a market that inspires trust and confidence. it requires the cooperation and commitment of government as major issuer, of the financial regulators, of the tax authority, and you, the market players. together we must build a public good that advances the welfare of all. at the very core, we need to maintain transparency and adhere to strong standards of governance. we desire prices to be efficiently discovered. as a market, we have experienced the dangers of purely bilateral trades, uncontrolled leverage and inefficient settlement. we need a yield curve that reflects active trade across a broad range of activities to serve as the sensitive and critical reference point to properly price risk and guide the market through changing conditions. we need competent and responsible market intermediaries and reliable and robust infrastructure that can provide the desired efficient access to the markets from wherever they are in our archipelago. changing market incentives ladies and gentlemen, the issues i just raised comprise a long enough list, but as you know, they are not exactly new either. with all the challenges, we remain a bank - based financial market. i believe however that three developments are pushing the pace of real reforms in our capital market. first, banks today face a “ new normal ” - one that demands a “ fresh perspective on risk ”. necessarily, this means banks must define a new strategic path moving forward. although capital adequacy ratios have been kept above the regulatory minimum, capital is as much a scarce resource as any. in this sense, banks may be very liquid but they cannot and should not chase every credit option that

evolution of assets in the loan book is, however, quite different. here, the well - established stylised fact is that write - downs lag the real economy ’ s cycle this also holds in the current situation. loan losses will be a drag on banks ’ earnings going forward. using the information from a time series as well as a cross - section dimension for the whole german banking system, we conclude that further write - downs of between €50 billion and €75 billion are to be expected. it goes without saying that, particularly at this juncture, these estimates ( see charts 5 and 6 ) are subject to significant uncertainty. statistical relations are likely to be less robust than they have typically been in the past. we should add that our assumption for economic growth is significantly less benign than the current consensus. therefore, if the economic recovery accelerates, as assumed in recent forecasts, banks ’ revaluation requirements would be correspondingly lower. needless to add, the projected potential write - downs will not automatically translate into additional capital requirements. current income as well as loan - loss provisions can obviously also be used to cover potential losses. nevertheless, banks would be well advised to steel themselves against possible negative developments. they have won time to tackle their accumulated problems and prepare for future contingencies. they should use the capacity to adjust that has been created, first and foremost, to bolster their risk provisioning, shore up their capital and enhance their cost efficiency. currently, the low level of lending largely reflects german enterprises ’ weak demand for credit, hence access to credit is currently not impaired by capital scarcity. but looking ahead, fatter capital cushions would strengthen banks ’ capacity to cater to the rising corporate borrowing demand which typically accompanies an upswing. at the same time, the pricing of this credit supply should be commensurate with the underlying risks. iii macroprudential approach – a new focus for supervisors and regulators after having successfully stabilised the financial system, governments, central banks and prudential supervisory authorities around the world now face the challenge of drawing the appropriate conclusions to prevent a crisis of such a magnitude from recurring. by its nature, financial stability is a public good. it cannot therefore be ensured solely on a private basis. there is a significant difference between private and social rationality. actions that are reasonable from an individual perspective may generate unintended externalities which produce adverse implications for systemic stability. consequently, financial stability cannot be expected to arise