npls, while allowances for impairment ( under the ifrs ) covered 67 % of gross npls. movements in npls in the coming period will depend primarily on the situation in the real sector, but also on the domestic legal framework and its efficiency. confirming the commitment of competent government authorities to tackling npls in a systematic and comprehensive way, in august 2015 the government of the republic of serbia adopted the national npl resolution strategy. the strategy is being implemented by experts from the nbs, ministries of finance, justice, economy and construction, the deposit insurance agency and other competent authorities and institutions. the nbs has implemented all activities envisaged by the action plan. the results are already visible as npls fell by 4. 6 pp in 2016 to their lowest since january 2011. it is high time we dedicated a part of our future endeavours to increasing efficiency, availability and quality of services of the financial sector, particularly to ensuring further growth in sound credit activity. there are no perfect, competitive markets anywhere in the world, serbia included. from a social viewpoint, it is important that profit be at least partly transferred from companies to consumers, from banks to clients – in the form of lower prices and better services. we are confident that banks will be led by the objectives of long - term sound and sustainable operation, while at the same time mindful of the interests of financial services consumers. dear colleagues and friends, some people examine the past to define the future. i believe that we need to glance at the past only occasionally, just to be reminded of what we have learned and experienced, and look around us to see what we have accomplished, but that we must constantly look towards future challenges. this is the only recipe for success! and maybe, using the example of the nbs, in a part where we are similar to the economy, i could comment on it with mr [ group executive of market development for europe, jason ] lane, and invite him to help serbia, using the reputation of the large and well - known company such as mastercard, to preserve a domestic card called “ dina ” by co - branding, because until we value ourselves, we will not be valued by others. and i value the opinion of each and every one of you. thank you for your attention. 5 / 5 bis central bankers'speeches

about by job destruction, while the easing in inflation has corrected to a lesser extent the gap built up during the upturn. this behaviour highlights the slow and imperfect functioning of the competitiveness channel, which should in principle lead to a containment of prices and costs in those economies that accumulate bigger external misalignments. indeed, achieving lasting improvements in competitiveness requires greater cost and price adjustments and productivity gains associated with genuine improvements in productive efficiency. however, since 2007 the spanish economy ’ s external deficit has been substantially corrected, dipping from 10 % of gdp in 2007 to 3. 4 % of gdp in 2011. underpinning this narrowing of the deficit has been the buoyancy of exports and the sluggishness of imports, in step with the weakness of domestic demand. notwithstanding, the culmination of this adjustment is conditional upon certain elements such as the deficit on the energy balance and the magnitude of the investment income payments component, with a negative balance equivalent to 2. 7 % of gdp in 2011, which is very closely related to the high level of the international investment position. these factors all accentuate the importance of those reforms contributing to correcting the deficit through the boosting of sustainable competitive gains in the medium and long term. the correction of this imbalance is particularly pressing in that the reliance on external saving has become a major factor of vulnerability of the spanish economy during the crisis. the increased dependence on external financing in the pre - crisis period is the consequence of the sizeable accumulation of debt by households and firms, which also led to the spanish banking system becoming oversized. the need to correct these imbalances poses an added difficulty to recovery in the economy, given that it restricts the headroom available to raise investment and consumption through resort to external financing. it is also crucial to continue with the restructuring of the banking system. hence, when solvent demand recovers, it may be serviced by a normal flow of financing which, both in spain and in the rest of continental europe, is routed essentially through credit institutions. but households and firms still have a relatively lengthy process of debt reduction ahead of them. accordingly, in the short term, the recovery in growth cannot be credit - led as in the past. along these lines, credit to the non - financial private sector in 2011 fell by around 4 %, although there were significant differences from sector to sector. in the case of households the pace of debt reduction was somewhat slower, whereas in that of firms the reduction in credit was