characteristics of the two financial crises are different, let me share 3 common themes that run through both crises. the first has to do with the tendency of the market to assume that current market conditions can be extrapolated into the long term. before the asian financial crisis, most investors extrapolated the rapid growth in asia and the currency pegs maintained by some countries without factoring in the sustainability of such trends. this time round, the strong credit market from 2003 to 2005 have lulled investors into placing big bets in high - yielding structured credit instruments, on the assumption that such favourable credit conditions will continue unabated. the second point is on proper risk assessment. back in 1997, lenders were providing funds without executing necessary scrutiny or appropriately balancing the risks against returns. likewise, the recent credit turmoil has highlighted the importance of assessing risks. the distribution of risk through leveraged structured vehicles or conduits, and complexities in the structures have made it extremely difficult for investors to disaggregate the risks in times of stress and volatility. as a result, over - reliance has been placed on financial models and ratings without full comprehension of the risks of the product and misunderstanding the scope of the ratings that measures default risk. third, excessive leverage in both crises has exacerbated the problems triggered by the mounting default rates. excess liquidity led to massive domestic lending ; at the same time, investors geared up aggressively and bet on continually rising asset prices as collateral. when the crisis broke, the use of leverage accentuated the losses, which led to widespread risk aversion and uncertain market sentiments. the loss of confidence along with the repricing of credit risk have intensified the volatility in the financial markets ; and this contagion spread rapidly beyond the structured credit space and across markets. so what does all this mean for asia? the inter - connectedness of global financial markets and capital flows has been amply demonstrated. the resilience and current strong economic growth in asia have therefore to battle against the strong headwinds and challenges from the global financial landscape. the sub - prime - triggered credit turbulence has, undoubtedly, created a lot of uncertainty. the adverse impact of the potential slowdown in the us economy is likely to be felt in asia as the region ’ s economies are generally export - oriented. large and volatile capital flows into the region have also placed pressures on exchange rates. this has posed risks of inflationary pressures, intensified by the recent high

and the state. second, legal provisions to facilitate debt restructuring agreements by reducing the liability of the individuals involved. and third, after many delays, a framework for electronic auctions for the recovery of claims. an electronic auction platform has become increasingly important as physical auctions have essentially come to a standstill, which has caused significant losses for creditors, debtors and the economy as a whole. let me now briefly turn to the liability side of banks ’ balance sheets. deposits are the cornerstone of any sound banking system. a stable deposit base allows banks to engage in maturity transformation and to extend credit to the real economy. so far, however, there is no evidence of a sustained return of private deposits in greece. since the summer of 2015, when capital controls were imposed, private sector deposits have only recorded a modest 2. 5 % increase. they remain some 25 % below their levels at the end of 2014 before deposit outflows accelerated noticeably. the upshot is that greek banks still rely to a significant extent on central bank funding. although recourse to our facilities, including emergency liquidity assistance, has fallen from 41 % of total assets in june 2015 to around 21 % of assets today, total central bank funding still amounts to more than 35 % of greek gdp. part of the reduction in central bank funding is attributable to improved access to wholesale financing. this is certainly good news. greek banks have gradually returned to the interbank market and were able to perform repo transactions with a wide range of mostly international counterparties – also thanks to the ecb, in june last year, reinstating the waiver affecting the eligibility of greek government - related assets for eurosystem monetary policy operations. 2 / 4 bis central bankers'speeches but for credit to become a vital source of economic growth in greece again, a lot will depend on banks being able to regain the trust of private depositors and rebuild stable funding lines in wholesale funding markets. of course, this is not only in the hands of banks. broader macroeconomic stabilisation is essential, as i will explain in a second. but banks need to contribute actively to this process by making further progress in repairing the asset side of their balance sheets – that is, by reducing the amount of non - performing loans. debt sustainability and the public sector purchase programme restoring confidence, of course, also means dispelling uncertainty about the sustainability of greek government debt – and this brings me back to my opening remarks. i think we