Academic literature on the topic 'Bank quarantee'

The aim of this study is to explain the calculation of return on mudh�rabah time deposit for the depositors of Islamic banks, and the provision of a fair return to the depositors without leaving any shariah elements. These two issues have become urgent to be discussed in this study, because if their money is deposited in Islamic banks, it will increase the amount of funds available in the Islamic bank, and the amount of funds available directly influence the size of the investment return on Islamic banks. If the results of the large investment, the returns will be obtained by the depositors are also large, and vice versa. In addition, it will also create a sense of calm and peace for themselves, because the money they have deposited in Islamic bank is not only quaranteed by the gorverment but also the system is run in accordance with the shariah of Islam.

In the mid-2000s, banks competed for leadership in the growth of new points of sale of services. Today, the positive for the bank is the closure of branches with a minimum physical presence in the administrative territory, while without reducing the number of clients. The purpose of the article is to analyze the situation in Ukraine on reforming network banks regarding their presence outside the head office, the possibility of maintaining branches in the structure of the bank (points of sale). The dynamics of the share of cash and non-cash transactions carried out by bank customers has been assessed. It was revealed that the expansion of the payment infrastructure and the network where payment cards are used affects the further fate of bank branches. During the quarantine period, under the influence of digitalization, the physical workload of on banks branches decreased due to the fact that today they (branches) are not the only points of sale of banking services. At the same time, most of the new functions arising from the digitalization of banking processes can be performed by the central offices of the bank. The popularity of internet acquiring is growing rapidly, the advantages of which are the speed of the operation, the absence of the need for the physical use of the payment card itself, the absence of the need for a POS terminal in the store, the possibility of making payments in 24/7 mode. The current trends in banking activity indicate that face-to-display and display-to-display communication will completely replace the modern understanding of banks. In the future, there will be new ways to store your own resources, for example, storage in “cloud technologies”; plastic cards will physically disappear, which will be replaced by tokens; cash will remain at a minimum level (within 2-5% of the amount of non-cash payments), which will be dealt with by SIT companies; lending will switch to P2P mode.

The article analyses the peculiarities of the global pandemic COVID-19 impact and related quarantine restrictions imposed on the Ukrainian banking sector and other European countries. The purpose of the study is to determine the negative consequences of such an impact due to the global pandemic COVID-19, as well as to outline the effectiveness of implemented (planned) measures of governments and central banks to neutralize the effects of this impact on banks. Particular attention is paid to: the study of changes in GDP dynamics in European countries in the crisis periods of 2008-2009 and 2019-2021; the analysis of the efficiency of banks during the global crisis of 2019-2021; determining the quality of the Ukrainian banks’ loan portfolio (by economic sectors). The scientific paper notes that the negative factor influencing the stability of the country’s banking sector (during the crisis period of 2019-2021) is the increased dependence on banks investments in government securities and low diversification of banks credit investments in various sectors of the economy (especially this issue applies to state-owned banks in Ukraine). Examining the liquidity of the banking sector, it has been determined that the National Bank of Ukraine has taken similar global measures to support the liquidity of banks during the global pandemic. The anti-crisis measures introduced by the National Bank of Ukraine since December 2020 were also analysed in detail, among which the most effective were: restructuring of loans for individuals and enterprises; development by banks of plans for resumption of their full-fledged activity; suspension of the introduction of capital buffers; weakening in terms of liquidity ratio LCR.

Abstract : Public services in government agencies are starting to change from a direct face-to-face way that the process must be back and forth if there is a shortage of files and take a long time, turning into a service online. In order to improve the satisfaction of public service in government agencies, especially the agricultural quarantine Hall of Class II Cilegon, then the process of application of plant quarantine import, export and domistic can be done online using the system, So that the quarantine submission process can be monitored in realtime. This information system consists of two parts, namely the first part is the front end used by the community in monitoring the process of filing plant quarantine. The second part is the back end used by the file verification Officer, the functional coordinator in delivering the task letter to the field officer, the Laboratory officers provide laboratory verification results, the Treasurer sends Billing payments to the community and head of the hall in monitoring every process of quarantine submission from the community. The back end uses the website.

The paper analyzes the evolution of the introduction of international standards for bank capital regulation. The aim of the research is to study international standards for bank capital regulation and their impact on financial stability and sustainability of domestic banking systems. The 2007—2009 Global Financial Crisis was perhaps the greatest banking and financial crisis since bank failures and the financial panic of the Great Depression in early 1930s. According to academics and professionals, there has been much debate over the last decade as to whether the 2007—2009 banking crisis was primarily a solvency crisis or a liquidity crisis. Capital adequacy of banks today is the main indicator of increasing society’s confidence in banking systems. The flexible and balanced implementation of Basel Committee on Banking Supervision (BCBS) recommendations on the assessment of bank capital adequacy is of particular importance in the context of the deepening economic crisis caused by COVID-19 quarantine restrictions. Regulation of bank capital is primarily settles by the ability to execute basic functions inherent in it. A number of shocks in connection with the crisis require the renewal and search for a new paradigm of regulation, which today is focused on achieving financial stability, overcoming pro-cyclicality, especially in the banking sector. One of the latest developments in the field of bank capital regulation has been the implementation of international banking supervision standards recommended by BCBS, which have been transformed from Basel I, Basel II, Basel III, Basel 3.5 to Basel IV. The new ideology suggests that in times of financial and economic crisis or in anticipation of growing uncertainty in the economy, it is necessary to abandon the idea of bank capital management and the creation of financial reserves to maintain liquidity and stability of financial institutions. These measures will not be able to protect the bank from default and bankruptcy. This ideology has become a new paradigm of effective banking regulation, which can be formulated as an accepted set of three vectors: risk; risk management; risk-oriented supervision.

- This is a review article based on 40 years of experience in the field of policy and project appraisal and evaluation. The author has had an extensive career in this area in the World Bank, the European Commission, Italian Government Ministries and in academia. The review concludes that cost benefit analysis extended to "real options" and applied jointly with the "effects method" helps solve certain critical issue of traditional financial and economic appraisal and evaluation techniques. More significantly, it contributes to better integrate financial and economic evaluation and appraisal techniques with organizational and sociological evaluation techniques. Key words: appraisal, evaluation, World Bank, distribution weights.

This study aimed to estimate the effect of the coronavirus disease 2019 (COVID-19) quarantine on low back pain (LBP) intensity, prevalence, and associated risk factors among adults in Riyadh (Saudi Arabia). A total of 463 adults (259 males and 204 females) aged between 18 and 64 years and residing in Riyadh (Saudi Arabia) participated in this cross-sectional study. A self-administered structured questionnaire composed of 20 questions regarding demographic characteristics, work- and academic-related aspects, physical activity (PA), daily habits and tasks, and pain-related aspects was used. The LBP point prevalence before the quarantine was 38.8%, and 43.8% after the quarantine. The LBP intensity significantly increased during the quarantine. The low back was also the most common musculoskeletal pain area. Furthermore, during the quarantine, a significantly higher LBP intensity was reported by those individuals who (a) were aged between 35 and 49 years old, (b) had a body mass index equal to or exceeding 30, (c) underwent higher levels of stress, (d) did not comply with the ergonomic recommendations, (e) were sitting for long periods, (f) did not practice enough physical activity (PA), and (g) underwent teleworking or distance learning. No significant differences were found between genders. The COVID-19 quarantine resulted in a significant increase in LBP intensity, point prevalence, and most associated risk factors.

In outbreak prevention and infection control amid the COVID-19 pandemic, the Philippine government mandated the returning Overseas Filipino Workers (OFWs) to undergo a 14-day quarantine and isolation upon arrival in the country. In this light, this study utilized Heideggerian existential phenomenology to describe the experiences of OFWs in the quarantine facilities and the meanings they associated with their 14-day quarantine experience. Six purposively selected OFW-informants participated in the study. From the findings, five main themes emerged: (1) concerns and challenges of uncertainties, (2) emotional struggles, (3) process of coping, (4) meanings associated with their quarantine experience, and (5) their trusts and hopes. This study recommends a strengthened psycho-social support program to manage distress among OFWs and provide information and services needed to mount an appropriate response to assisting OFWs in this pandemic.

Accounting terms are very important for every company in the sphere of company finance, accounting terms are claims and accounts payable. The aim of this work was detailed description of claims, then show the control system of the claims of ENVIRO-EKOANALYTIKA and propose improvements to the existing claims management system. The main reasons why claims come into existence are business relations, but they can be caused by provided deposits, loans and bank credits. Claims from business relations are necessary parts of belongings, because every businessman needs goods and services from others. A company can analyse high earnings and profit in accounting but his financial resources can be essentially different. For a company is very important to have a sufficient number of financial resources and to this a company ensures of claims and then restricts entrepreneurial risk. The ensuring of claims means that contractual partner is obliged to realise his account payable. General forms to ensure claims are for example: penal clause, liability, acknowledge a debt, bank quarantee or altitude of debt. We can divide claims in risk claims and abandoned claims. During trading a lot of profits are formed, these profits can be evoked by for example: political or economical events, announcing a financial insolvency or natural catastrophe. Between the most frequent cause of risk claims are mainly the absence of morality in business relations. If the payment of claim is not done until fixed date, the claim gets the bad debt. The only way how to anticipate abandoned claims is, that busines men do not let them come into existence. The proceedings also include claims recovery. The main objective of recovery is to get customers to pay, and as early as possible. Most companies use a standard procedure for recovery, which includes telephone reminders, terminating the supply of credit, written reminders, the transmission of judicial or extrajudicial recovery.

The article is devoted to a review of the main institutions operating in the market of credit and investment resources for Russian small and medium enterprises (SMEs). The work revealed disproportionality in providing Russian SMEs with financing: the largest share falls on own funds and usury, banks account for up to 20%, other sources are insignificant). Meanwhile, abroad, this structure is more diverse and balanced. The possibilities of individual credit and investment institutions for providing small enterprises with borrowed funds are analyzed using the example of collective financing institutions (business angels, crowdfunding and crowdinvesting sites); specialized (leasing, factoring and microfinance organizations) and state organizations (JSC “SME Corporation”, regional guarantee organizations, JSC “SME Bank”), as well as venture and banking companies. Actual tendencies occurring in various markets of financial resources for small firms are noted, taking into account the quarantine-isolation measures of 2020.

This first-person activist reflection discusses the author’s experience immigrating to Canada as a queer AIDS activist. The author situates his experience navigating HIV-positive-exclusionary immigration policies where the only avenue for immigrating while HIV-positive is through gay marriage. Canada maintains a draconian set of discriminatory laws regarding the so-called “excessive demand” HIV-positive immigrants put on the publicly funded health care system in Canada. This piece briefly looks at the history of HIV travel and immigration bans as well as proposed HIV quarantine legislation across Canada. While Canada is often regarded as more progressive than the United States in many ways, its HIV immigration ban and high prosecution and conviction rate for HIV nondisclosure make Canada one of the most legally precarious countries for HIV-positive people in the west.

The aim of this paper is to put together in a concise form, the major experience of the author during covid-19 lockdown. It covers the author’s personal challenges, benefits and achievements during the quarantine period. Important steps for actualising great results and the academic social media networking sites were pointed out in this paper. It was concluded that one can actually make the best out of the odd situations

While quarantine was a staple of public health efforts for centuries to combat such scourges as the plague and the Spanish flu, with the advent of vaccines, antibiotics, and new treatments in the twentieth century, public health practitioners increasingly viewed quarantine as a regressive and backward approach. These revolutionary technologies effectively put an end to diseases that had once killed or maimed millions, such as polio and smallpox—leading to a new optimism among medical scientists that society might one day be rid of infectious diseases. As chronic illness replaced infectious disease as the leading cause of death in the twentieth century, public health came to view individual health behaviors—such as smoking and diet—as the primary cause of disease. Under this new individualism, smokers and the obese became the new Typhoid Mary. To control these modern health threats, public health devised new strategies, such as health marketing and education. But the volatile politics of AIDS threatened to turn back the clock on public health practice, as conservatives demanded that HIV-positive people be quarantined—or worse.

During 2020, the Covid-19 pandemic left its mark on almost every sphere of the economy. Travel bans, bans on entry and exit and the countries in which people live, mandatory quarantine after entering another country, fear of mutual contacts and locking of large European and world cities have affected tourism to feel the effects of the pandemic. In order to reduce the movement of the population infected with this virus, it was not uncommon for the personal data of those infected to be published. This paper aims to analyze the legal and economic aspects of the protection of personal data of tourists during the Covid-19 pandemic. The paper also proposes a software solution that would enable better control and registration of infected persons, all with the aim of preventing the spread of the virus by travel.

Terrorism constituted an important element of the wider ensemble of ideas and images that Narendra Modi’s election campaign disseminated. It reiterated the Bharatiya Janata Party’s idea of India as, essentially, a Hindu nation; Hindus as authentic citizens and Muslims as the ‘other’. Based on a survey of Modi’s election speeches, BJP’s publicity material and the extensive commentary and analysis focused on the person of Narendra Modi, this paper argues that terrorism as an election issue was carefully calibrated by Modi’s managers: a spectre of imminent threats was raised, dangerous ‘other’ identified, the outgoing government was lambasted for failing to quarantine the danger, and an alternative Modi model of battling terrorism held up. This had the effect of crafting the tough, muscular, macho Hindutva icon who would rein in ‘Islamic terrorism’, and consolidating and rallying a majoritarian vote bank behind this leader.

Humans have long blamed immigrants and outsiders for epidemics. This perceived association between newcomers and disease has led many nations to impose health-related immigration controls that screen newcomers for disease and disability and deny entry to many newcomers on health and disability-related grounds. In the United States, quarantine and other such policies began in the nineteenth century, and were long influenced by both racism and eugenics; more recently, many nations around the globe have imposed travel bans, barring entry by people who are HIV positive. Nations also perpetuate disability discrimination, excluding immigrants with a range of disabilities on the theory that they will be unproductive and costly to taxpayers. These health- and disability-related immigration exclusions fail to protect public health and reinforce stigma and discrimination against immigrants and natives with disabilities.

This paper presents non-classical models for estimating and forecasting COVID-19 pandemic indices. These models have been successfully tested on country data where the pandemic is nearing completion. In particular, an effective algorithm for mortality index evaluation is also presented. This index is usually replaced by more simple estimates such as, for instance, „the number of deaths divided by the number of infected”; however, while the virus is at the stage of its rapid distribution, such superficial approaches are incorrect. Model indicators of the infection itself allow us to predict not only the apogee of the epidemic and the end of the quarantine period, but also the maximum number of infected people in some country (continent) during the height of the epidemic. The second part of the paper is devoted to an attempt to build regression models to explain (with using 100+ country socio-economic indicators taken from the World Bank data) the behavior of the epidemic spread indices. It is shown that the maximum number of infected people in the country is well predicted (R-square is close to 90%); and, moreover, migration indicators and the number of international air take-offs are effective regressors. Other indicators, for example, the mortality index, are difficultly modeled; nevertheless, it has a significant relationship with socio-economic factors. The presented paper might be valuable for making effective decisions to forestall some future pandemics or even the „second wave” of COVID-19.

1.1 Macroeconomic summary Economic recovery has consistently outperformed the technical staff’s expectations following a steep decline in activity in the second quarter of 2020. At the same time, total and core inflation rates have fallen and remain at low levels, suggesting that a significant element of the reactivation of Colombia’s economy has been related to recovery in potential GDP. This would support the technical staff’s diagnosis of weak aggregate demand and ample excess capacity. The most recently available data on 2020 growth suggests a contraction in economic activity of 6.8%, lower than estimates from January’s Monetary Policy Report (-7.2%). High-frequency indicators suggest that economic performance was significantly more dynamic than expected in January, despite mobility restrictions and quarantine measures. This has also come amid declines in total and core inflation, the latter of which was below January projections if controlling for certain relative price changes. This suggests that the unexpected strength of recent growth contains elements of demand, and that excess capacity, while significant, could be lower than previously estimated. Nevertheless, uncertainty over the measurement of excess capacity continues to be unusually high and marked both by variations in the way different economic sectors and spending components have been affected by the pandemic, and by uneven price behavior. The size of excess capacity, and in particular the evolution of the pandemic in forthcoming quarters, constitute substantial risks to the macroeconomic forecast presented in this report. Despite the unexpected strength of the recovery, the technical staff continues to project ample excess capacity that is expected to remain on the forecast horizon, alongside core inflation that will likely remain below the target. Domestic demand remains below 2019 levels amid unusually significant uncertainty over the size of excess capacity in the economy. High national unemployment (14.6% for February 2021) reflects a loose labor market, while observed total and core inflation continue to be below 2%. Inflationary pressures from the exchange rate are expected to continue to be low, with relatively little pass-through on inflation. This would be compatible with a negative output gap. Excess productive capacity and the expectation of core inflation below the 3% target on the forecast horizon provide a basis for an expansive monetary policy posture. The technical staff’s assessment of certain shocks and their expected effects on the economy, as well as the presence of several sources of uncertainty and related assumptions about their potential macroeconomic impacts, remain a feature of this report. The coronavirus pandemic, in particular, continues to affect the public health environment, and the reopening of Colombia’s economy remains incomplete. The technical staff’s assessment is that the COVID-19 shock has affected both aggregate demand and supply, but that the impact on demand has been deeper and more persistent. Given this persistence, the central forecast accounts for a gradual tightening of the output gap in the absence of new waves of contagion, and as vaccination campaigns progress. The central forecast continues to include an expected increase of total and core inflation rates in the second quarter of 2021, alongside the lapse of the temporary price relief measures put in place in 2020. Additional COVID-19 outbreaks (of uncertain duration and intensity) represent a significant risk factor that could affect these projections. Additionally, the forecast continues to include an upward trend in sovereign risk premiums, reflected by higher levels of public debt that in the wake of the pandemic are likely to persist on the forecast horizon, even in the context of a fiscal adjustment. At the same time, the projection accounts for the shortterm effects on private domestic demand from a fiscal adjustment along the lines of the one currently being proposed by the national government. This would be compatible with a gradual recovery of private domestic demand in 2022. The size and characteristics of the fiscal adjustment that is ultimately implemented, as well as the corresponding market response, represent another source of forecast uncertainty. Newly available information offers evidence of the potential for significant changes to the macroeconomic scenario, though without altering the general diagnosis described above. The most recent data on inflation, growth, fiscal policy, and international financial conditions suggests a more dynamic economy than previously expected. However, a third wave of the pandemic has delayed the re-opening of Colombia’s economy and brought with it a deceleration in economic activity. Detailed descriptions of these considerations and subsequent changes to the macroeconomic forecast are presented below. The expected annual decline in GDP (-0.3%) in the first quarter of 2021 appears to have been less pronounced than projected in January (-4.8%). Partial closures in January to address a second wave of COVID-19 appear to have had a less significant negative impact on the economy than previously estimated. This is reflected in figures related to mobility, energy demand, industry and retail sales, foreign trade, commercial transactions from selected banks, and the national statistics agency’s (DANE) economic tracking indicator (ISE). Output is now expected to have declined annually in the first quarter by 0.3%. Private consumption likely continued to recover, registering levels somewhat above those from the previous year, while public consumption likely increased significantly. While a recovery in investment in both housing and in other buildings and structures is expected, overall investment levels in this case likely continued to be low, and gross fixed capital formation is expected to continue to show significant annual declines. Imports likely recovered to again outpace exports, though both are expected to register significant annual declines. Economic activity that outpaced projections, an increase in oil prices and other export products, and an expected increase in public spending this year account for the upward revision to the 2021 growth forecast (from 4.6% with a range between 2% and 6% in January, to 6.0% with a range between 3% and 7% in April). As a result, the output gap is expected to be smaller and to tighten more rapidly than projected in the previous report, though it is still expected to remain in negative territory on the forecast horizon. Wide forecast intervals reflect the fact that the future evolution of the COVID-19 pandemic remains a significant source of uncertainty on these projections. The delay in the recovery of economic activity as a result of the resurgence of COVID-19 in the first quarter appears to have been less significant than projected in the January report. The central forecast scenario expects this improved performance to continue in 2021 alongside increased consumer and business confidence. Low real interest rates and an active credit supply would also support this dynamic, and the overall conditions would be expected to spur a recovery in consumption and investment. Increased growth in public spending and public works based on the national government’s spending plan (Plan Financiero del Gobierno) are other factors to consider. Additionally, an expected recovery in global demand and higher projected prices for oil and coffee would further contribute to improved external revenues and would favor investment, in particular in the oil sector. Given the above, the technical staff’s 2021 growth forecast has been revised upward from 4.6% in January (range from 2% to 6%) to 6.0% in April (range from 3% to 7%). These projections account for the potential for the third wave of COVID-19 to have a larger and more persistent effect on the economy than the previous wave, while also supposing that there will not be any additional significant waves of the pandemic and that mobility restrictions will be relaxed as a result. Economic growth in 2022 is expected to be 3%, with a range between 1% and 5%. This figure would be lower than projected in the January report (3.6% with a range between 2% and 6%), due to a higher base of comparison given the upward revision to expected GDP in 2021. This forecast also takes into account the likely effects on private demand of a fiscal adjustment of the size currently being proposed by the national government, and which would come into effect in 2022. Excess in productive capacity is now expected to be lower than estimated in January but continues to be significant and affected by high levels of uncertainty, as reflected in the wide forecast intervals. The possibility of new waves of the virus (of uncertain intensity and duration) represents a significant downward risk to projected GDP growth, and is signaled by the lower limits of the ranges provided in this report. Inflation (1.51%) and inflation excluding food and regulated items (0.94%) declined in March compared to December, continuing below the 3% target. The decline in inflation in this period was below projections, explained in large part by unanticipated increases in the costs of certain foods (3.92%) and regulated items (1.52%). An increase in international food and shipping prices, increased foreign demand for beef, and specific upward pressures on perishable food supplies appear to explain a lower-than-expected deceleration in the consumer price index (CPI) for foods. An unexpected increase in regulated items prices came amid unanticipated increases in international fuel prices, on some utilities rates, and for regulated education prices. The decline in annual inflation excluding food and regulated items between December and March was in line with projections from January, though this included downward pressure from a significant reduction in telecommunications rates due to the imminent entry of a new operator. When controlling for the effects of this relative price change, inflation excluding food and regulated items exceeds levels forecast in the previous report. Within this indicator of core inflation, the CPI for goods (1.05%) accelerated due to a reversion of the effects of the VAT-free day in November, which was largely accounted for in February, and possibly by the transmission of a recent depreciation of the peso on domestic prices for certain items (electric and household appliances). For their part, services prices decelerated and showed the lowest rate of annual growth (0.89%) among the large consumer baskets in the CPI. Within the services basket, the annual change in rental prices continued to decline, while those services that continue to experience the most significant restrictions on returning to normal operations (tourism, cinemas, nightlife, etc.) continued to register significant price declines. As previously mentioned, telephone rates also fell significantly due to increased competition in the market. Total inflation is expected to continue to be affected by ample excesses in productive capacity for the remainder of 2021 and 2022, though less so than projected in January. As a result, convergence to the inflation target is now expected to be somewhat faster than estimated in the previous report, assuming the absence of significant additional outbreaks of COVID-19. The technical staff’s year-end inflation projections for 2021 and 2022 have increased, suggesting figures around 3% due largely to variation in food and regulated items prices. The projection for inflation excluding food and regulated items also increased, but remains below 3%. Price relief measures on indirect taxes implemented in 2020 are expected to lapse in the second quarter of 2021, generating a one-off effect on prices and temporarily affecting inflation excluding food and regulated items. However, indexation to low levels of past inflation, weak demand, and ample excess productive capacity are expected to keep core inflation below the target, near 2.3% at the end of 2021 (previously 2.1%). The reversion in 2021 of the effects of some price relief measures on utility rates from 2020 should lead to an increase in the CPI for regulated items in the second half of this year. Annual price changes are now expected to be higher than estimated in the January report due to an increased expected path for fuel prices and unanticipated increases in regulated education prices. The projection for the CPI for foods has increased compared to the previous report, taking into account certain factors that were not anticipated in January (a less favorable agricultural cycle, increased pressure from international prices, and transport costs). Given the above, year-end annual inflation for 2021 and 2022 is now expected to be 3% and 2.8%, respectively, which would be above projections from January (2.3% and 2,7%). For its part, expected inflation based on analyst surveys suggests year-end inflation in 2021 and 2022 of 2.8% and 3.1%, respectively. There remains significant uncertainty surrounding the inflation forecasts included in this report due to several factors: 1) the evolution of the pandemic; 2) the difficulty in evaluating the size and persistence of excess productive capacity; 3) the timing and manner in which price relief measures will lapse; and 4) the future behavior of food prices. Projected 2021 growth in foreign demand (4.4% to 5.2%) and the supposed average oil price (USD 53 to USD 61 per Brent benchmark barrel) were both revised upward. An increase in long-term international interest rates has been reflected in a depreciation of the peso and could result in relatively tighter external financial conditions for emerging market economies, including Colombia. Average growth among Colombia’s trade partners was greater than expected in the fourth quarter of 2020. This, together with a sizable fiscal stimulus approved in the United States and the onset of a massive global vaccination campaign, largely explains the projected increase in foreign demand growth in 2021. The resilience of the goods market in the face of global crisis and an expected normalization in international trade are additional factors. These considerations and the expected continuation of a gradual reduction of mobility restrictions abroad suggest that Colombia’s trade partners could grow on average by 5.2% in 2021 and around 3.4% in 2022. The improved prospects for global economic growth have led to an increase in current and expected oil prices. Production interruptions due to a heavy winter, reduced inventories, and increased supply restrictions instituted by producing countries have also contributed to the increase. Meanwhile, market forecasts and recent Federal Reserve pronouncements suggest that the benchmark interest rate in the U.S. will remain stable for the next two years. Nevertheless, a significant increase in public spending in the country has fostered expectations for greater growth and inflation, as well as increased uncertainty over the moment in which a normalization of monetary policy might begin. This has been reflected in an increase in long-term interest rates. In this context, emerging market economies in the region, including Colombia, have registered increases in sovereign risk premiums and long-term domestic interest rates, and a depreciation of local currencies against the dollar. Recent outbreaks of COVID-19 in several of these economies; limits on vaccine supply and the slow pace of immunization campaigns in some countries; a significant increase in public debt; and tensions between the United States and China, among other factors, all add to a high level of uncertainty surrounding interest rate spreads, external financing conditions, and the future performance of risk premiums. The impact that this environment could have on the exchange rate and on domestic financing conditions represent risks to the macroeconomic and monetary policy forecasts. Domestic financial conditions continue to favor recovery in economic activity. The transmission of reductions to the policy interest rate on credit rates has been significant. The banking portfolio continues to recover amid circumstances that have affected both the supply and demand for loans, and in which some credit risks have materialized. Preferential and ordinary commercial interest rates have fallen to a similar degree as the benchmark interest rate. As is generally the case, this transmission has come at a slower pace for consumer credit rates, and has been further delayed in the case of mortgage rates. Commercial credit levels stabilized above pre-pandemic levels in March, following an increase resulting from significant liquidity requirements for businesses in the second quarter of 2020. The consumer credit portfolio continued to recover and has now surpassed February 2020 levels, though overall growth in the portfolio remains low. At the same time, portfolio projections and default indicators have increased, and credit establishment earnings have come down. Despite this, credit disbursements continue to recover and solvency indicators remain well above regulatory minimums. 1.2 Monetary policy decision In its meetings in March and April the BDBR left the benchmark interest rate unchanged at 1.75%.

The Colombian financial system has not suffered major structural disruptions during these months of deep economic contraction and has continued to carry out its basic functions as usual, thus facilitating the economy's response to extreme conditions. This is the result of the soundness of financial institutions at the beginning of the crisis, which was reflected in high liquidity and capital adequacy indicators as well as in the timely response of various authorities. Banco de la República lowered its policy interest rates 250 points to 1.75%, the lowest level since the creation of the new independent bank in 1991, and provided ample temporary and permanent liquidity in both pesos and foreign currency. The Office of the Financial Superintendent of Colombia, in turn, adopted prudential measures to facilitate changes in the conditions for loans in effect and temporary rules for rating and loan-loss provisions. Finally, the national government expanded the transfers as well as the guaranteed credit programs for the economy. The supply of real credit (i.e. discounting inflation) in the economy is 4% higher today than it was 12 months ago with especially marked growth in the housing (5.6%) and commercial (4.7%) loan portfolios (2.3% in consumer and -0.1% in microloans), but there have been significant changes over time. During the first few months of the quarantine, firms increased their demands for liquidity sharply while consumers reduced theirs. Since then, the growth of credit to firms has tended to slow down, while consumer and housing credit has grown. The financial system has responded satisfactorily to the changes in the respective demands of each group or sector and loans may grow at high rates in 2021 if GDP grows at rates close to 4.6% as the technical staff at the Bank expects; but the forecasts are highly uncertain. After the strict quarantine implemented by authorities in Colombia, the turmoil seen in March and early April, which was evident in the sudden reddening of macroeconomic variables on the risk heatmap in Graph A,[1] and the drop in crude oil and coal prices (note the high volatility registered in market risk for the region on Graph A) the local financial markets stabilized relatively quickly. Banco de la República’s credible and sustained policy response played a decisive role in this stabilization in terms of liquidity provision through a sharp expansion of repo operations (and changes in amounts, terms, counterparties, and eligible instruments), the purchases of public and private debt, and the reduction in bank reserve requirements. In this respect, there is now abundant aggregate liquidity and significant improvements in the liquidity position of investment funds. In this context, the main vulnerability factor for financial stability in the short term is still the high degree of uncertainty surrounding loan quality. First, the future trajectory of the number of people infected and deceased by the virus and the possible need for additional health measures is uncertain. For that reason, there is also uncertainty about the path for economic recovery in the short and medium term. Second, the degree to which the current shock will be reflected in loan quality once the risk materializes in banks’ financial statements is uncertain. For the time being, the credit risk heatmap (Graph B) indicates that non-performing and risky loans have not shown major deterioration, but past experience indicates that periods of sharp economic slowdown eventually tend to coincide with rises in non-performing loans: the calculations included in this report suggest that the impact of the recession on credit quality could be significant in the short term. This is particularly worrying since the profitability of credit establishments has been declining in recent months, and this could affect their ability to provide credit to the real sector of the economy. In order to adopt a forward-looking approach to this vulnerability, this Report presents several stress tests that evaluate the resilience of the liquidity and capital adequacy of credit institutions and investment funds in the event of a hypothetical scenario that seeks to simulate an extreme version of current macroeconomic conditions. The results suggest that even though there could be strong impacts on the credit institutions’ volume of credit and profitability under such scenarios, aggregate indicators of total and core capital adequacy will probably remain at levels that are above the regulatory limits over the horizon of a year. At the same time, the exercises highlight the high capacity of the system's liquidity to face adverse scenarios. In compliance with its constitutional objectives and in coordination with the financial system's security network, Banco de la República will continue to closely monitor the outlook for financial stability at this juncture and will make the decisions that are necessary to ensure the proper functioning of the economy, facilitate the flow of sufficient credit and liquidity resources, and further the smooth operation of the payment systems. Juan José Echavarría Governor