This obviously had an impact on bank solvency, giving rise to significant capital requirements for some banks, which needed public support to cover the capital shortfalls identified. Since then, the situation has improved considerably, with the help of the monetary policy measures implemented by the European Central Bank to ensure that solvent banks had sufficient funding. Against a background of significant decline in banking activity, banks have managed to reduce the weight of troubled assets in their balance sheets very significantly. Specifically, 7/17  the NPL ratio has fallen by more than eight percentage points to stand at 5.8% of total lending. Foreclosed assets, meanwhile, are only 50% of the level recorded in 2014, so that their weight has been reduced to 3.6% of assets, vis-à-vis the resident private sector. Active management of these assets by banks, under supervisory pressure, has played a very important role in this process. In any event, there is still significant room for improvement; before the international financial crisis, the NPL ratio was below 1% and foreclosed assets were practically non-existent. The restructuring of credit institutions is also reflected in the reduction in the weight of the real estate sector (broadly defined),2 which stood at 52% of GDP in 2018, as compared with 99% in 2008. 2  Loans for house purchase, plus loans to businesses in the construction industry and related areas.
•  And looking ahead, if foreign exchange transactions become centrally cleared, what role can and should CLS play to facilitate the safe settlement of those transactions? •  I’d note, CLS has plenty of strategic choices there, always a good sign. Second, CLS was created by private sector leadership and financial institutional commitment and industry collaboration is a key part of a successful future. •  CLS cannot do its work alone. What makes CLS successful are members who are proactive in identifying and working with CLS on opportunities to further strengthen the CLS ecosystem, particularly in a market that is rapidly changing. •  That will require not just member support but also member investment. Third, the birth of CLS and its development exemplifies the productivity of public sectorprivate sector collaboration. We have different roles, but a common interest in the performance and resiliency of the foreign exchange market. As we play our respective roles, we can make each other more insightful and better performing. We have done that here in foreign exchange settlement – and speaking personally, I would like to see private sector and public sector tackle more opportunities across the financial markets. Let me end by congratulating CLS and all who are part of it on these first 10 very successful years, thank the wider group here for the collaboration you have developed within the industry, and thank you also for the partnerships you have forged with central banks, most especially, with the Federal Reserve Bank of New York.