The natural resources sector reduced its annual growth rate by more than two points compared with the previous quarter, primarily related to lower mine production early in the quarter, but also to the significant drop in fishery. Sectors other than natural resources performed below trend in the second quarter. Growth was mainly driven by trade and construction, while other areas linked to investment slowed. Installed capacity utilization has declined accordingly. Domestic demand slowed down further in the second quarter. Final demand, however, which excludes inventories, continued to grow at the same pace of the first quarter. Gross fixed capital formation posted y-o-y expansion flat from the first quarter of this year, but below the figures of the second half of 2012. As has been noted before, this slowdown owes mainly to the maturing of mining investments after three years largely outperforming GDP. Also in an external context where the copper price has dropped and moderating expectations for growth around the world but especially in China, which call for more caution when evaluating investment decisions. On the other hand, private consumption was more dynamic, especially in its non-durable component, while durables remained high. Labor market conditions have continued to tighten, but are still the main driver of this component. Nominal and real wages have moderated their annual variation, while the unemployment rate remains near all-time lows. Again, unlike previous cycles, credit growth has accompanied private income, but has not been the main determinant of household spending.
Basel II principles require all banks to address all risks, such as credit risks, market risks, operational risks and others. The principles envisage that banks should have in place systems that would help identify, measure, monitor and make provisions for such risks. The domestic banks are aware of the importance that the application of the new standard should coincide with concentration on risk management in keeping with the best global practices by using the best technological solutions. Reviewing the topics of this Symposium and the quality of its speakers, I see that it broadly covers aspects and all types of applications of banking risk management as Basel II principles seek to highlight and address. In conclusion, I express my deep thanks to the audience and the organizers of this symposium, and we look forward to having positive contributions and outstanding papers, wishing you all success. Al Salumu Alaikum Warahmatu Allahi Wabarakatuh. IS Review 125/2006  1