which being in bankruptcy conditions between 2003 and 2006 and having risks concentrated on entities of their group. against this background, the deposit guarantee scheme was activated in 2003 in accordance with the prevailing regulatory framework. in august 2003 and in light of these failures, the 1990 banking law was revised to strengthen the licensing conditions, increase the minimum capital requirement, which also became fully due in cash, and strengthen the banking commission missions. in particular, the commission was given exclusive competence to exceptionally extend the deadline for the publication of banks and financial institutions ’ financial statements. in parallel, the supervisory capacities of the bank of algeria have been significantly reinforced since the beginning of the 2000s ; bank of algeria ’ s corps of inspectors being legally in charge of implementing the supervisory program set up by the banking commission. the financial sector assessment program jointly carried out by the imf and the world bank in 2003 and updated in 2007, together with the associated technical assistance, contributed to strengthening bank of algeria ’ s supervisory tools. as of 2002, the supervisory framework also benefited from the adoption of a regulation on internal control of banks and financial institutions, which requires them to establish an internal control system for their activities and associated risks in order to improve risk assessment, management, and control. the emergence of excess liquidity in the money market since 2002 led to the introduction of new monetary policy tools in order to mop it up effectively. based on a comprehensive regulation adopted by the council on money and credit in 2005, important progress was achieved in 2006 in modernizing the payment systems, including the real - time gross settlement system for large value and urgent payments and the clearing system for retail payments. the efficiency and safety of transactions occurring through these systems have been strengthened since then, in line with international standards. to improve bank financing of private enterprises, especially smes, the government initiated reforms regarding loan guarantees in the 2000s. these include an increase in the level of guarantee ( from 50 to 250 million dinars ) provided by the guarantee fund for investment credits ( cgci ), the creation of the national investment fund and regional investment agencies, and the introduction of an interest rate subsidy on investment loans. these bis central bankers ’ speeches measures have substantially contributed to increasing the share of credit to the private sector in total credit, which rose by 24 percentage points ( from 31. 3 % to 55. 3 % ) over the last decade. as a non - bank source of investment financing, financial market financing - mainly bond issuance – has significantly increased since 2002 in

trace data show what trades have taken place, not what trades have potentially been foregone because of any possible diminution of market liquidity. gaining a better understanding of this phenomenon is being actively researched by my staff. in contrast to the market liquidity metrics such as bid - ask spreads, indirect evidence on market liquidity suggests that there has been a decline. asset managers report that large blocks of securities are now harder to buy and sell without generating significant movements in prices. also, average trade sizes have decreased ( exhibit 4 ) and there is evidence of a growing bifurcation in the corporate bond market, with greater activity and liquidity in those bonds that were issued more recently, larger in size or brought to market by larger issuers. also, capital and liquidity requirements for the largest securities dealers – which have been raised significantly since the financial crisis – might have adversely impacted market liquidity. these regulatory changes likely have affected the profitability of dealer intermediation activities and consequently the provision of market liquidity. for the treasury market, the most important change in regulatory requirements appears to be the supplementary leverage ratio ( slr ). the slr limits the leverage of dealer balance sheets. in the slr, all assets are treated the same in terms of required regulatory capital. consequently, the slr is much tougher on low - risk assets as compared to the risk - based capital measures that it complements. this makes the economics of repo - financing much less attractive. not surprisingly, we observe significant declines in the quantity of repo financing by dealers ( exhibit 5 ). for the corporate bond market, the most relevant regulatory changes appear to be the increase in the basel risk - weighted capital ratio, the comprehensive capital and analysis review ( ccar ) stress tests and the volcker rule – which prohibits proprietary trading for a number of asset classes such as corporate bonds, albeit not u. s. treasuries. we do observe significant declines in recent years in securities dealers ’ holdings of corporate bonds ( exhibit 6 ). it would be surprising if these declines in repo and corporate bond holdings did not have some consequence for market liquidity. however, we do not observe marked declines in dealer holdings of treasuries, even as overall dealer assets have stagnated ( exhibit 7 ). the see adrian, fleming, stackman, vogt ( 2015 ) has u. s. treasury market liquidity deteriorated?, liberty street economics blog, august 17