I would only like to mention that the National Bank has commenced the activities for implementing BASEL II in the Macedonian banking system. Does and will this crisis have an impact on our economies? It already has and it will have an additional impact depending on its duration. The first blow is for the real sector. In all of our countries, depending on the structure of the economy, the export sector will be most severely hit. BIS Review 18/2009  5  Consensus Forecasts of October 2008, envisages that the growth of the US economy will equal 1.4% and in 2009 it will be 0%, with a projected fall of the personal consumption and faster decline in the investment consumption. The growth of the EU economy for 2008 has been adjusted downward (1.4%) and for 2009 it is 0.6%. For an illustration, 60% of the Macedonian export is in the EU countries. The trading conditions have already deteriorated and we project further deepening of the trade and the current account deficits, whereas the increased minus between the exports and the imports will act toward reducing our growth rate. We expect a negative impact also in the capital and financial accounts, but at this moment it is difficult to quantify it. Banking will not be hit directly. There is no exposure in risk-bearing financial instruments. Deposits are dispersed according to the regulations.
On the financial markets, the trust to the others plummeted to a point below which the investors sought their way out mainly in the government instruments, for example US Treasury Bills, which at a certain point had a negative yield. Distrust went much further than the sub-group of vulnerable banks. The reports reveal that USA and Europe have registered market losses from the asset loans of nearly 3 trillion US Dollars. Regardless of the fact that all these losses will not encumber the banks and can overemphasize the losses of those able to keep the debt until the maturity, the investors and their partners became very concerned about the amount of the actual losses in the banking and trade portfolio in broader scope of the institutions and their capability to continue financing their business. The focus of the concern moved from prospective profitability to prospective survival. That is why the CDS premium increased to unprecedented ranges, the prices of the banks' shares plunged, while the money market overdried. The interbank lending margin deepened dramatically, the lending, as I mentioned previously, reduced to only overnight loans. Around October 6 and7 even the overnight loans stopped. How did the central banks of the countries in the crisis' epicenter respond? In the beginning, the central banks were committed to provide liquidity as much as necessary. The volume of the liquidity support from the central banks of USA, England, Europe was without precedent in the history so far.