to the worsening of the crisis in 2008. but the financial markets are still functioning much less efficiently than normal. it is also still difficult for companies to finance themselves in the capital market. the riksbank has also implemented a large number of unconventional measures to safeguard financial stability and mitigate the negative effects of the financial crisis. during the second half of 2008 the riksbank increased its lending to the banks by more than sek 450 billion. almost sek 200 billion of this was comprised of loans in us dollars. we have largely financed this through a swap agreement with the fed. our own foreign exchange reserve was not sufficiently large to manage such extensive lending in dollars. the increased lending has meant that the riksbank ’ s balance sheet grew during the second half of 2008 from around sek 200 billion to around sek 700 billion. we have also changed our collateral requirements so that the banks can offer more types of security as collateral and thus more easily sustain their functions in the market. we have given special liquidity assistance to kaupthing and carnegie to safeguard financial stability and ensure the functioning of the financial markets. we have begun offering loans with commercial paper as collateral to facilitate companies ’ financing. we have also signed swap agreements with iceland and latvia to support crisis management in these countries. and we have cut the interest rate. since the monetary policy meeting in february we have further extended these unconventional measures. we have decided on loans with longer maturities, with variable interest rates and with smaller supplements and we have signed a swap agreement with estonia. the swedish national debt office and finansinspektionen ( the swedish financial supervisory authority ) have also taken action to alleviate the financial crisis. the government has raised the state deposit guarantee and extended it to cover all types of deposits in accounts, it has introduced a guarantee programme, established a guarantee fund and decided on means of capital injections to the banks. at the same time, the government is conducting a more expansionary fiscal policy than before. i now intend to move on to describe international developments. international developments will be weak this year the world economy was in a slowdown phase even before september 2008. since then the deterioration in the world economy has been rapid. all of the large, developed economies are now in recession. during the fourth quarter of last year gdp growth in the united states and the euro area fell by around 6 per cent calculated on an annual rate. in japan the fall was even greater, more than 12 per cent calculated

financial stability fund were used. the second recapitalization took place in 2014, following a macro - prudential stress test, but involved only private equity capital injections. a further recapitalization took place at the end of 2015, mainly due to the uncertainty that prevailed in the first half of that year, which had a negative impact on macroeconomic and financial fundamentals. following agreement on the third adjustment programme, a financial envelope of €25 billion was provided for the banking system. in august 2015, the ecb launched an asset quality review and stress - test exercise for the four systemic greek bis central bankers ’ speeches banks. the ecb was the appropriate authority because, since november 2014, the four systemic banks have been supervised by the single supervisory mechanism ( ssm ). the bank of greece undertook a similar exercise for the smaller banks. the result of this exercise was identification of capital needs under both a baseline and an adverse macroeconomic scenario. the actual amount of capital raised was that identified under the adverse scenario, namely €14. 4 billion. thanks to the coordinated efforts of the greek authorities and the bank of greece, successful rights issues resulted in the full coverage of the shortfall by december 2015, with private investors subscribing about €9 billion. these efforts minimized hfsf participation and helped to restore confidence in the longer - term viability of greek banks. as a consequence, greek banks now have among the highest capital ratios of banks in the euro area. those deemed non - viable were resolved with their ‘ good ’ part absorbed by systemic banks. the resolution tool used had to meet two main criteria. first, resolution had to be done in such a way as to ensure continued stability of the financial system. to that end, all deposits from resolved banks were transferred to systemic banks. this process also ensured a minimum of disruption for customers of resolved banks. the second criterion was to minimize the costs of restructuring for tax - payers. the bank of greece assessed that the costs of using the purchase and assumption resolution tool were lower than any alternative. with 14 such resolutions having successfully taken place since 2011, this process has also facilitated considerable restructuring of the banking system, eliminating excess market capacity. e. challenges ahead, the way forward and concluding remarks ladies and gentlemen, with the successful completion of the first review, a number of positive benefits are likely to ensue for the banking system. the reinstatement of the waiver will allow greek government bonds to