##c stated that the pace of economic recovery had slowed in recent months, indicating that it would take a little longer for the us to return to the normal state. similarly the euro - zone faces a situation in which the sovereign risk problems of certain southern european countries have not yet been fundamentally resolved. nevertheless the july 23rd announcement of the results of the stress tests carried out on european banks have greatly allayed concerns about the future of the euro - zone banking system. for its part, the chinese economy may well see its pace of growth slow from that of recent months as both leading and coincident indexes of economic activity have declined in line with the blunting of both investment and production growth while real estate prices have receded. amid these uncertainties, the global financial markets may prove turbulent in the future and there is the likelihood of the heightened volatility of business activity in the major countries. at the end of the day, nonetheless, the underlying pattern is that of a continuing modest recovery in economic activity in the us, albeit its pace of recovery slowed down a little recently, the euro - zone and other major countries along with the improving tone of the world economy. principal international organizations such as the imf and major central banks see little risk of the world economy drifting into a double - dip recession. the korean economy bolstered by these improvements in world economic conditions the korean economy is continuing its pronounced upward trend. in the first half of this year the gdp growth rate came in at 7. 6 % year on year, driven by resilient domestic and external demand. exports led the economic upswing with exports for the whole month and daily average exports chalking up their highest - ever monthly figures. private consumption built up consistently owing to increased wage payments and improved employment conditions while facilities investment expanded greatly in a climate of revived business confidence. what was particularly noteworthy was the clearly marked improvement from april onwards in labor market conditions, which had largely given rise to the lingering concerns about the private sector ’ s capacity to pull itself up by its own bootstraps. the number of persons employed in the private sector, i. e. stripping out public - sector employment, expanded by 300 thousand persons year on year in april and this was followed up by a widening of the scale of increase to 650 thousand persons in july. the increase of the total number of employed persons year on year in july turned out to be 470 thousand persons as there was a decrease in public sector employment by about 180 thousand persons. these

had already been identified as the existing european stability mechanism ( esm ). the view that the prerequisite for all this was the creation of a single supervisor was immediately put forward, because this would have helped eliminate the mutual distrust, and so it had to be the starting point. the single supervisory mechanism ( ssm ) was set up in a record time : it was made up of the european central bank and the national supervisory authorities, and became operational in november 2014. such rapid implementation was possible thanks to a provision in the treaty expressly assigning the ecb prudential supervision functions. in addition, the ssm could right from the beginning rely on a whole set of common prudential rules ( single rulebook ), contained in the package of regulations crr / crd4 which had already transposed basel iii agreements in europe. in the meantime, crises of banks of different sizes had spread in many european countries, due to reasons ranging from the burst of real estate speculative bubbles, as was the case in spain and ireland, to the contagion of “ toxic ” instruments in structured finance, as in germany. banks in distress were saved using public resources ( bail - out ) : 240 billion euro in germany, borne by german taxpayers, 50 billion in spain, financed with the european funds collected by the esm, 40 billion in ireland and almost the same amount in the netherlands, and so on. in italy public intervention was only a tiny fraction of those just mentioned and – what ’ s more – took the form of a loan, very profitable for the state. on the other hand, in italy the burden of deteriorated loans was getting heavier and heavier, mainly as a consequence of the long recession. the massive public bailouts of european banks ended in the first half of 2013. in july 2013 the european commission issued a communication laying down guidelines on state aid, binding for all the member states. since then state aid could be granted only under very stringent conditions and subject to a “ burden sharing ” by shareholders and subordinated bondholders : a principle similar to the “ bail - in ” underpinning the new european bank recovery and resolution directive ( brrd ), which was being drafted. the new way of solving banking crises in april 2014, the european parliament approved the brrd, which fully introduced, as from 2016, the bail - in principle. since the beginning of this year the single resolution mechanism ( srm ) has become fully operational in the euro area