The sum of each column is the Krugman Specialisation Index (multiplied by a factor of 100) and is a measure of dispersion of industrial structure. A value of 0 indicates all regions within a monetary union have an identical industrial structure. The higher the index, the more diverse the industrial structure across regions. A more detailed description of different indexation measures of specialisation can be found in Appendix B of EMU and business sectors (HM Treasury). (a) Based on data for Vulnerable Euro Area Periphery economies (VEAPS) (Ireland, Portugal, Spain, Greece, Italy) and core (all other EA countries). (b) Based on data for 17 Euro Area (EA) countries (all EA countries excluding Malta). (c) Estimates for rUK and Scotland exclude the 'extra-regio' contribution from North Sea mining & extraction. (d) The contribution from 'extra-regio' mining & extraction is allocated on a ‘geographical’ basis. This assumes that around 90% is allocated to Scotland and 10% to the rest of the UK. This is in line with estimates proposed by Professor Kemp and used by the Scottish Government. Used here for illustrative purposes. (i) Throughout this annex the abbreviation ‘rUK’ refers to the UK excluding Scotland.
14  BIS central bankers’ speeches  Chart 5: Cost of default protection for euro area core and periphery banking systems Periphery  Core  Basis points 800 700 600 500 400 300 200 100  2009  2010  2011  2012  2013  0  Sources: Markit Group Limited, SNL Financial,Thomson Reuters Datastream and Bank calculations. Notes: Asset-weighted five-year senior CDS premia for major banks in each country. 'Periphery' covers Greece, Ireland, Italy, Portugal and Spain. 'Core' covers Austria, Belgium, France, Germany and the Netherlands. Chart 6: Real economy lending growth – core/periphery divergence Core Periphery  Percentage changes on a year earlier  30  20  10  0  2004  2006  2008  2010  2012  -10  Sources: ECB and Bank calculations. Notes: Periphery includes Greece, Ireland, Portugal and Spain. Core includes Austria, Finland, France, Germany, Luxemburg and the Netherlands. Lending to non-MFIs excluding general government (adjusted for sales and securitisation). Weighted using 2012 GDP weights. BIS central bankers’ speeches  15  Chart 7: Euro area non-financial corporations loan rates – core/periphery divergence € Periphery Core  Interest Rate, per cent  8  6  4  2  2003  2005  2007  2009  2011  2013  0  Sources: ECB and Bank calculations. Notes: Average interest rate on new lending to NFCs (excluding revolving loans and overdrafts, convenience and extended credit card debt). Core: Austria, Belgium, Germany, Finland, France and Netherlands. Periphery: Italy, Portugal, Spain and Ireland.