supply side that constrain the sme ’ s access to finance and other banking products and services. on the demand side, these issues can be tackled through a more systematic documentation and disclosure of information by smes and better business planning. on the supply side, bankers ’ reluctance to lend to smes can be addressed through innovative credit assessment tools and techniques like credit scoring and better capacity building efforts for the financial service providers. among various stakeholders that have to play their role for sme development, i think, state bank of pakistan and commercial banks both need to play a proactive role in improving access to finance for smes. as far as sbp is concerned, it has taken a number of important initiatives for improving access to credit for sme sector. these measures include a provision of specialized prudential regulations ( prs ) for smes, refinance schemes for smes, credit guarantee scheme for small and rural enterprises and cluster development surveys. further, sbp has been assisting banks through a holistic ifc technical assistance and capacity building initiative encompassing areas of strategy formulation, product bis central bankers ’ speeches development, risk management and hr development etc. for sme lending. presently, bank alfalah ltd. is being supported for capacity building to boost sme banking, while many other mid - tier banks are being considered for similar ifc technical assistance. ifc is in direct dialogue with a number of banks. we hope that this project will revitalize sme lending by participating financial institutions and will be a prototype for other financial institutions which could see financing to smes as profitable business ventures. aside from the boost sme provides to employment and overall growth to the economy, it also provides diversification to a bank ’ s balance sheet and in turn a stable revenue stream to support long term shareholder value. given the huge potential for this sector, i encourage all the commercial banks to review their sme strategies and assume a greater role in sme lending. ultimately it has to be the private sector which has to take the lead role in lending to the sme sector given their critical positioning and greater capacity in terms of their outreach and availability of funds. as i earlier mentioned, the actual statistics for lending to smes have not been encouraging in recent years. banks ’ credit to smes has declined over the last 4 years from rs 437 billion in 2007 to rs 248 billion in june, 2012. although, this decline can be partly attributed to adverse economic conditions during the period and

mark w olson : the importance of market structure remarks by mr mark w olson, member of the board of governors of the us federal reserve system, before the annual conference of the central bank of chile santiago, chile, 13 december 2002. * * * it is a great pleasure for me to participate in this interesting and thought - provoking conference, and i wish to begin by thanking carlos massad and the central bank of chile for inviting me to attend. my remarks today will address, from my perspective as a policymaker, a former banker, and a former adviser to the congress, some of the issues that were raised in this morning's session and that will be discussed in this afternoon's presentations. specifically, i would like to comment on some of the potential implications of the u. s. banking sector's changing structure for competition in the context of the board's supervision and antitrust responsibilities. i will also discuss the deposit insurance system, which is administered through the federal deposit insurance corporation ( fdic ) and the allocation of credit, with a focus on loans to small businesses. as everyone here is fully aware, changes in market structure can have profound effects in each of these areas. by changes in market structure, i will refer primarily to changes in the number, size, charter, and other characteristics of firms on the supply side of banking and nonbanking markets brought about by the ongoing consolidation of the banking and financial services industry. however, the demand side of markets is also clearly relevant, and when necessary, i will include demand characteristics in my discussion. the issues to which i refer are not new nor unique to the united states but, rather, have existed for many years and transcend national boundaries. in fact, the consolidation of banks and other types of financial institutions is one of the most notable features of the international financial landscape over the past decade or more. in recognition of the importance of financial consolidation, its potential impact on market structure, and its potential implications for public policy concerns, the finance ministers and central bank governors of the g - 10 nations in late 1999 asked their deputies to study financial consolidation and its potential effects. my colleague, roger ferguson, directed this study, which was published in early 2001. today, i would like to use some of the findings of the study as my starting point for addressing the issues i mentioned a few moments ago. because the study was international in scope it will allow me to put some of my comments on the united states into a