Organisational changes to address the challenge of financial innovation The role of regulators and supervisors is to contribute to harnessing in full the benefits of innovation while maintaining risks within reasonable and socially acceptable limits. As you can imagine, this is no easy task and requires the authorities themselves to undertake internal transformation processes so as to be able to appropriately meet these challenges. As a result of this need, the Banco de España has in recent years assigned growing resources to monitoring and analysing financial innovation. The first step was the creation, in February 2017, of an internal group with representatives from different business areas within our central bank to gain a cross-departmental view of the phenomenon and to promote coordination among these different areas. One year on, we have deemed it necessary to take a further step, assigning specific resources to the analysis of financial innovation. To do this, a new Associate Directorate General was created last March. This new area pursues three major aims: (i) to understand the dimension of the changes taking place, (ii) to analyse the consequences of the new developments, and (iii) to provide for coordination and contact with the market and the other authorities involved, including those from other jurisdictions since, in short, financial technological innovation is a global phenomenon. The ultimate aim is to develop an overview of the main features and challenges facing financial services-providers.
In the context of a greater expansion of credits to the economy during the past two years, particularly in real terms, the net flow of credits to private enterprises has mainly consisted of medium and long term credits extended to finance investment. Overall, excluding credits repurchased by the Treasury, bank credits to the private sector (enterprises and households) stood at dinar billion 3120 by end 2014, with the share of medium and long term credits increasing from 62.3 percent by end 2013 (61.3 percent by end 2012) to 64.3 percent. The dynamism of bank credit to the economy, mainly for the benefit of private enterprises, clearly reflects the improvement in the financing structure and conditions as a result of the measures taken by the Government to boost medium and long term credits to the private sector, notably measures implemented in 2013 to facilitate SMEs’ access to bank credit. In parallel, banks improved information provided to SMEs on required investment credit documentation and made notable progress in reducing processing times. After fourteen years of savings surplus, 2014 and 2015 recorded a cycle reversal. The drastic oil price fall as of mid-2014 resulted in a widening savings-investment gap. Six years after the international economic and financial crisis, the Algerian economy, like other oil exporting countries, has been affected by the resource contraction as of 2015. However, credits to the economy continued to expand (15.9 percent in 2015), mainly for the benefit of private enterprises.