These advantages and disadvantages, however, represent an opportunity for the financial sector to further focus on financial support through financing these enterprises, commensurate with risk level that must be taken into consideration when financing SMEs, and to set appropriate finance prices commensurate with risk levels. 2  BIS central bankers’ speeches  Ladies and Gentlemen, Business Enterprises have witnessed significant growth in recent years. The number of enterprises subscribing to the Social Insurance System went up from about 121.5 thousand in 1426H to approximately 218.4 thousand in 1430H, recording an annual average growth of 16 percent. Individual proprietorship firms represented 93.1 percent of the total of annual average growth, limited liability Enterprises 4.7 percent and holding Enterprises 0.6 percent. Economic activity of these enterprises was focused in three areas: commercial activity 34.3 percent, construction and building 32.3 percent and manufacturing industries 14.6 percent. Small Enterprises with less than 5 employees accounted for the largest share of 55.5 percent of the total number of enterprises at the end of 1430H, while the rest, enterprises with more than 60 employees represented 3.8 percent. These data show that most of the enterprises in the Kingdom are small, in terms of the number of workers. SMEs’ contribution to the Kingdom’s GDP is very low, accounting for 33 percent, while SMEs constituted 64.3 percent of Japan’s GDP, 43.3 percent of Spain’s GDP, 56 percent of France’s GDP, 44 percent of Austria’s GDP, 43 percent of Canada’s GDP and 33 percent of Australia’s GDP.
Resolution is the toughest nut to crack in the financial reform package, but it is also the one that I think does more to unlock other issues, including the appropriate steady-state endpoint for the bank capital regime. Put simply, the answer in my view is different in a world of effective resolution that ends too big to fail. But in the alternative outcome, where too big to fail remains with us and there are doubts around the effectiveness of resolution, it is hard to avoid the conclusion that higher capital requirements will follow, and cross-border establishment will be through subsidiaries. Let me also say that we have made more progress on resolution in the last few years than many people expected. To say that we are not there yet should not conceal the real progress made. And, an important credit on this goes to Paul Tucker who has led much of the international policy thinking on resolution. Paul leaves us at the end of the week for the calmer environment of Harvard – we shall miss him in many ways, and I hope that when we get to an outcome on bank resolution that meets our wish to reject the permanence of fragmentation, we will remember how much Paul did to get us there.