improvement. the world bank ’ s annual doing business report examines business regulations in, at last count, 189 economies on the basis of 36 indicators. china is currently ranked in 90th place. there is therefore still room for improvement. this can be achieved, for instance, by forging ahead with agreements to use common standards and dismantling barriers to market entry. achieving a mutual understanding of corporate culture in the various markets can be aided through personal contact. more and more chinese delegations are coming to germany every year. one of the objectives of these visits is to examine and gain an understanding of small and medium - sized family businesses and their structures. after all, this organisational structure is often cited as a blueprint in reforming the chinese growth model – even though it could never be adopted in every single aspect. in china, it is intended that a corps of small and mediumsized private enterprises will provide “ new ”, more qualitative growth and boost the innovative power and competitiveness of chinese enterprises. over the past decade, china has been attempting, through various channels, to support the established enterprises by offering fiscal incentives such as tax breaks. at a meeting between the chinese president and the federal chancellor during the former ’ s visit in march 2014, both countries agreed to establish a high - level financial dialogue. this took place for the first time in the spring of this year in berlin. the aim of the meeting between the finance ministries and the central banks is to institutionalise cooperation, also in financial matters. this concerns, among other things, not only issues of financial supervision and regulation, but also international cooperation within the g20. an outcome of the meeting is that assistance is to be provided for investment by small and medium - sized enterprises and the cross - border settlement of securities and derivatives is to be made easier. i expect that these trade relations will become even closer and that financial relations, too, will continue to deepen. bis central bankers ’ speeches

immune from loss - sharing ) large banking outflows and spreads exceeding five per cent made recourse to official assistance inevitable. ( figure 3 shows the plot with some relevant news stories flagged ). perhaps the most significant take - away from the sequence of spikes and troughs is the fact that some of them clearly relate to news that is country - specific, some of them to euro area general news. the same is doubtless true for all of the stressed sovereigns. default risk vs. devaluation risk vs. redenomination risk it ’ s worth pausing to recall that raw sovereign spreads such as we are seeing today in the euro area are not remotely unprecedented in pre - euro history. on the contrary, they were the norm as is illustrated by figure 1. the difference is that these spreads reflected a combination of default risk and currency risk. during the last fiscal crisis of the 1980s irish sovereign spreads ballooned out also. but that was for local currency denominated debt. eurobond borrowing by the irish government remained at fairly tight spreads despite the high overall debt ratio ( higher than today ), and the fact that almost half of the national debt was denominated in foreign currency. the high spreads reflected devaluation expectations and currency risk generally. and there were devaluations, though less than was baked into the spreads – by between 250 and 300 basis points on average during the last ten years of that ill - fated regime, the narrow - band ems. it is not that default and devaluation are close substitutes ; not at all, and for several reasons. for one thing, default has potential reputational consequences for the issuer qualitatively different to those of devaluation. in addition, though, devaluation affects not only the international value of the government ’ s debt promises, but also that of all other contracts denominated in local currency ; as a result, depending on the speed of price - resetting ( pass - through ) it can affect competitiveness throughout the economy. these differences have not been sufficiently emphasised, i feel, in recent discussion. as an example, i could mention the irish devaluation of august 1986. the main goal of this important action was restoration of wage competitiveness, not a lowering of the real value of the local currency - denominated debt. ( indeed, i recall that some domestic policymakers were confused on this point and thought that the debt burden would actually increase as a