bursting of the it bubble in 2000 and in the following year productivity did not increase at all. since then productivity has increased rapidly during the 2000s up to last year ( see figure 3 ). during the economic upturn in recent years it took longer before employment accelerated. most indications are therefore that the strong productivity growth in recent years was not solely a cyclical phenomenon – it was also due to structural factors such as globalisation, use of information technology ( it ), deregulation of product markets and innovations. globalisation sharpens competition and pushes up productivity growth through a higher degree of specialisation and use of comparative advantages. sweden ’ s membership of the eu from 1995, the eu ’ s enlargement and the gradual intensifying of the eu ’ s common market have been significant factors here. new, large markets, such as china, india and the earlier planned economies in eastern europe are being rapidly integrated into the world economy. trade barriers and customs duties between countries have declined. technological developments make it easier for companies to build up global trade and production networks. this has resulted in a strong increase in world trade. in sweden, this is reflected in the fact that exports have increased from around 30 per cent of gdp in 1990 to around 50 per cent in 2006. another tendency that is related to globalisation is that integration of companies over national borders has increased. studies by the oecd indicate that a country's productivity increases if companies in the country have a large degree of foreign ownership. 1 quite simply, a multinational company must be better than the local competitors in order to outweigh the handicap of operating in a foreign country. compared with other european countries, sweden has a high percentage of foreign - owned companies. this percentage has increased substantially since the mid - 1990s. in the manufacturing industry around 40 per cent of the criscuolo ( 2005 ). employed are now working in foreign - owned companies. the corresponding figure in the services sector is 55 per cent. 2 it is another factor that has probably contributed to the rapid rate of increase in productivity over the past 10 - 15 years. the significance of it is visible in two ways ; in production and use. if we look at the production of it, we can observe that the telecom industry's share of total industry is relatively large in sweden compared with many other countries. this means that the rapid development in productivity that has occurred in the telecom sector has contributed to pushing up productivity growth in the business sector as a whole

advanced nations in the west, the gnpas have risen to 2. 94 per cent as on march 2012 and further to 3. 42 per cent as at the end of march 2013. as per the provisional data, as on december 2013, the gnpa ratio was at 4. 47 per cent. the ratio of restructured standard advances to gross advances stood at 5. 8 per cent at end - march 2013 adding to the total stress. 21. all indian banks, including foreign banks in india, migrated to the standardized approaches of basel ii by march 31, 2009 in two phases. large sized indian banks and banks with international presence have been encouraged to adopt the basel ii advanced approaches for computation of capital for credit, market and operational risk. out of the 14 banks that submitted applications for migration to the internal rating based approach for credit risk, seven have been given approval for parallel run. under operational risk, parallel run has been approved for two banks for the standardized approach ( tsa ) out of the 13 banks that applied. ten banks have so far conveyed their intent for migration to the advanced measurement approach ( ama ) of which cases of four large banks which made preliminary submissions in this regard are under different stages of examination. in respect of market risk, eight banks have conveyed their intent for migration to the internal model approach. 22. there is, however, another very significant aspect of the bank operations, just as in any corporate entity, and that is the commercial aspect viz., profitability management. profitability in banks, as in the corporates, is reflective of the financial well - being, health and robustness of the entity and has a direct bearing on its capital formation ability. on the flip side, if the bank ’ s strategies, business models, planning and operations and risk management are weak, obsolete or outdated or not in tune with the macro - economic environment, the income flowing there from may be low or may end up in losses. profitability is impacted by the business decisions of the bank, the business model it pursues, quality and type of asset base as also by operational efficiencies and any noteworthy shift in its strategies and policies. the risk profile of a bank can also be gauged from its income and expenditure statement to a great extent. however, currently alignment of the risk management and profitability management objectives is not so much in focus. 23. since the profitability or the income and expenditure plans and decisions of the banks are directly connected to the