I have three key messages on GMS connectivity to share with you today and would like to invite you to be a part of this exciting journey: Let’s think of the young vibrant graduate I mentioned, there is so much potential and opportunity she can explore. She can broaden her skills and horizon as she gains experience and professional networks over time. She will unavoidably face some challenges along the way. But with support from her peers, together with technological advancement, she will be able to stay on course for success. This is similar for our vibrant GMS. First: The GMS is a region full of opportunities. This is owing to its geography, complementarity and connectivity among its members and with other regions; Second: GMS’s endowments and opportunities can be expanded through enhancing financial connectivity, technology and innovation; and Third: Despite many challenges, policymakers and their private-sector partners can make a difference to the GMS region. ***  1  1. Why do I say that the GMS is a region of opportunities? Over the past 25 years, integration within the GMS has deepened, integrating a diverse group of members through physical, trade, investment as well as people-to-people connectivity. Even more remarkable is the recent growth momentum of the GMS.
The percentage of financially constrained but viable SMEs – defined as those with positive turnover in the last six months seeking a bank loan – was estimated to have varied from around 1% in Germany and Austria to a quarter of the SME population in Spain and as much as a third in Portugal. The second part of our response has therefore been to improve the transmission of loose market financing conditions into the actual borrowing conditions of firms and households. In this context, between June and September last year we launched our credit easing package to strengthen banks’ incentives to improve the availability and lower the price of credit. In parallel, we gave our full technical and operational support to the Comprehensive  BIS central bankers’ speeches  1  Assessment of bank balance sheets – the supervisory exercise aimed at forcing banks to acknowledge non-performing exposures and to raise provisions and capital where needed. This exercise was powerful in the sense that it accelerated what had until that point been a slow process of balance sheet repair in the euro area; banks strengthened their capital by over € billion in advance of the outcome. In this way the new monetary policy impulse coming from our credit easing package coincided with a banking sector in a stronger position to transmit it. But as these measures were coming into effect the euro area was hit, like all advanced economies, with a further downward shock to inflation emanating from the steep fall in global oil prices.