peers ( 50. 1 % vs. 46. 1 % eu average ). if one adds to this the value of collateral pledged, total risk coverage comes to 101 %, one of the highest in the eu. concluding, npls represent perhaps the most significant problem for the greek banking sector along with liquidity ( the two are of course interlinked ). the bank of greece in its capacity as supervisor together with the ssm took a set of measures over the last two years including a code of conduct for banks for the effective and flexible treatment of borrowers facing difficulties in servicing their debt obligations. moreover, the bank of greece adopted executive committee acts nos 82 / 2016 and 95 / 2016 detailing the licensing framework for credit servicing firms, striking a balance between speed, transparency and borrower protection. it also decided to set binding operational targets for all greek banks with a view to ensuring a reduction of npls over a horizon of three years. more specifically, according to the targets of the four systemic banks, npls should be reduced by 40 % or €41 billion by 2019. this reduction is expected to result from : firstly, the economic recovery envisaged in the adjustment programme and the ensuing return to profitability for a large majority of businesses and secondly, successful debt forbearance / restructuring whereby non - performing loans become performing again and a number of npls are sold to funds. c. one milestone - pending issue looking ahead, in terms of economic policy, the steps forward are clear and dictated by the memorandum between the greek authorities and our official international lenders which goes through the completion of the second review of greece ’ s adjustment programme by the end of this year, the specification of debt restructuring measures agreed - upon in the eurogroup meeting of 24 may 2016 which are the precondition for greece ’ s participation in the ecb ’ s public sector asset purchase programme ( pspp ), best - known as the “ qe programme ”. in terms of the mechanics, and applying the ecb ’ s 33 % issuer limit and subtracting the eurosystem holdings of greek government bonds, the maximum allowed purchases are €3. 8 billion. some could argue that the above amount is a mere pittance compared with the total eurosystem ’ s purchases. even in this respect, the signaling effect of greece ’ s inclusion in the 8 / 9 bis central bankers'speeches qe programme will be strong enough for ggb prices to recover, accompanied by a

john iannis mourmouras : developments in greece recent monetary and financial speech by professor john iannis mourmouras, deputy governor of the bank of greece, at the governors ’ club, a forum comprising the governors and deputy governors of the central banks of sixteen southeast european and asian countries, 30 october 2016. * * * thank you madam chair, governors, ladies and gentlemen, it is an honour to be here with you in the holy city of jerusalem and i would like to thank the governor of the bank of israel, karnit flug, for inviting me to this high - profile meeting. in the same governors ’ club meeting in shanghai in may 2015, i was given the chance to comment on the latest economic developments in greece. then i raised the alarm against the government ’ s delaying the negotiations with our lenders. two months after my speech in china, greece unfortunately witnessed the cost of backtracking, namely the deposit outflows which destabilised the banking system, called into question our country ’ s eurozone membership and resulted in the introduction of capital controls, a bank holiday, bank recapitalisation and, of course, the recession in 2015 and this year. a. the real economy however, it is fair to say that the situation has stabilised since the conclusion of the third memorandum agreement in september last year. economic activity picked up in the last two quarters of this year, from a negative growth rate in 2015, to reach positive territory ( + 0. 2 % yearon - year ) in 2016 especially if receipts from tourism remain buoyant. bank of greece estimates for next year show an increase in real gdp by 2. 5 % and 3 % in 2017 and 2018 ( figure 1 and table 1 ). the key drivers of growth are expected to be private investment and exports of goods and services. 1 / 9 bis central bankers'speeches both the economic sentiment indicator ( figure 2 ) and the industrial confidence indicator ( figure 3 ) have recovered in the second and third quarter of this year, while in the first half of july 2016 the number of tourist arrivals in airports in greece increased by 7 % and is expected to reach an 2 / 9 bis central bankers'speeches unprecedented total of about 25 million visitors in 2016, which is more than double the greek population. 3 / 9 bis central bankers'speeches the unemployment rate remains elevated ( 23. 2 % in july 2016 and 23. 1 % in the second quarter of 2016 ), posing