Academic literature on the topic 'Banking operation'

Led by foreign banks operating in Indonesia, many banks have switched their mainbusiness activities from corporate banking business to individual customer banking activities. This is due to the deteriorating general economic condition in Indonesia at the present time. Individual customer’s base operation for banking communities proved to be suitable and giving good returns. However, as many banks operating in the same basis, competition among banks has mounted considerably. One must be able to achieve trust and loyalty from their valued customers. This article tries to understand how bank in Surabaya should get these basic elements of trust and loyalty.Keywords: corporate banking business, individual customer banking, trust, loyalty.

The modern banking system is one of the key elements of any national economic system that influences the formation of economic processes. In this regard, it is important to identify the main elements of the banking system that have the greatest impact on the modern economy. The article reveals the financial and distinctive features of modern systemically important credit organizations of the Russian Federation. The authors of the article, based on the structural and dynamic analysis of the credit organizations indicators system, identified the main trends in the banking system development, highlighting the role of systemically important banks in this process. In the course of the analysis, based on the reporting data on the development of the Russian banking system for 2016-2019, the connection between the dynamics of the systemically important credit institutions development and the banking system as a whole was determined. The main conclusions presented in the article can be used in scientific and practical activities in order to strengthen and develop banking regulation and supervision of the largest Russian banks.

The article discusses selected aspects of international co-operation in combating selected types of cybercrime. The complex character of criminal activity besetting contemporary banking causes numerous difficulties and poses many challenges, such as detecting and apprehending perpetrators. Online banking crime constitutes a specific category, comprising cashless transactions and electronic data processing. The specific environment of online banking, where crime is committed, determines the nature of traces left by perpetrators; it also necessitates creation of new forensic methods based on modern technology. The more sophisticated the crime, the more difficult it is to identify the perpetrators. Therefore, international co-operation in combating cybercrime is essential.

The rationale of the research work is to suggest a multi-modal biometric authentication and secure transaction operation framework for E-Banking. The literature survey identifies the various types of E-Banking Channels available as on-date, the various types of biometric technologies available as on-date as well the significant metrics affecting their performance while deploying them in various different e-banking channels. The performance analysis of various types of biometric technologies based on significant metrics for Biometrics Implementation further identifies the currently implementable biometric technologies for the various different e-banking channels. Subsequently a requirement analysis of potential e-banking channels is followed by System Suitability Analysis to identify which multi-biometrics and support mechanisms are suitable for particular e-banking channels. The final conclusion suggests a viable multi-modal biometric authentication and secure transaction operation framework for various e-banking channels.

The operation of Islamic banking in Zanzibar started in 2011 to boost economic activities and meet the demand of its people. However, the introduction of Islamic banking was not followed by any legal amendment to suit the operation of Islamic banking in the country as per Islamic principles. This paper, therefore, examines different laws which governed the Islamic banking in Zanzibar to find how far they support the operation of Islamic banking. The findings of this paper revealed that some of the laws in Zanzibar contain provisions that do not support Islamic banking transactions. The methodology adopted in this paper is based on the content analysis of legislations, leading textbooks, and journal articles. The study used a comparative method to address the study in question. The study recommends amendment of some laws such as the Contract Decree, 1917 and Transfer of Property Decree, 1917, Stamp Duty Act 2017, and Value Added Tax Act, 1998 for improving the legal regime governing Islamic banking transactions in Zanzibar.

Information and Communication Technologies (ICT) have changed business operation trends. Information systems are considered a valuable asset and have the attention of the strategic and marketing decision floors. Use of information system and ICT in the banking industry have become indispensable, and have replaced traditional operations with electronic banking concepts. Electronic banking has brought many challenges for strategic managers to achieve strategic goals and overall customers’ satisfaction. This research study aims to investigate the impact of electronic banking in the context of IT usage, ease of use, its usefulness and the customer satisfaction among the Pakistan banking industry. Pakistan’s top five commercial banks were selected in five districts of KPK for data collection. Three hundred and three electronic banking customers were interviewed through a questionnaire containing 21 relative questions. The SPSS is used for the analysis, on data collected through the questionnaire. Descriptive analysis, correlation, regression and ANOVA have been computed for the results interpretations. From these results, it was found that the customers strongly agree to use information technology for banking operations, but they believe that the use of electronic banking has problems. The management should focus on its method of use. The customers suggested that the electronic banking operations should be simplified, should be user friendly, should be easy to understand, and thus its usefulness will enhance in achieving highly satisfied customers.

The aim of this study is to understand perception of conventional banks’ customers towards Islamic banking by examining their level of awareness about Islamic banking. The qualitative approach was used in the form of semi-structured interviews under the phenomenological approach in Damascus city. The main findings of this research are customers lack awareness of Islamic banking operations. Furthermore, Islamic banks’ stuff play a crucial rule to enhance awareness and willingness towards their services. This study revealed that an informative advertising campaign is highly recommended to raise the awareness level among Syrians towards Islamic banking. Moreover, Islamic banks should be more selective especially when they recruit customer service operation staff. This research is a pioneering attempt towards Islamic banking issues in the case of Syria from a customer perspective. It contributes to the Syrian perceptions towards Islamic banking literature.

The core purpose of this study is to follow the development of strategic alliances within the banking sector. The objective is to get an idea of the use of strategic alliances in German banking and, furthermore, to understand what kind of alliances are entered and why. This will be achieved by analyzing and evaluating different German banks. The aim is to follow the tendency of banks to co-operate with other banks and competitors as well as intersectoral partners.

1. Lobanova AL Resource policy of commercial banks of Ukraine / AL Lobanova // Finance of Ukraine. - 2005. - № 1. - P. 88–95. 2. Martyniuk J. Resource base of commercial banks / J. Martyniuk // Finance of Ukraine. - 1998. - № 11. - P. 112–114. 3. Marcin VS Problems and ways to increase the capitalization of banking institutions in the management of bank capital / VS Marcin // Finance of Ukraine. – 2007 - № 2. - P. 77–88 4. Maslak NG Problems of capitalization of the banking system of Ukraine / NG Maslak // Actual problems of economy. - 2004. - № 11. - P. 31–39.
The paper examines management systems that would allow a banking institution to forecast. Analyze and minimize their individual varieties and achieve a reduction in the impact of aggregate risk on their activities.

A competitive banking system plays a major role in the formation of the financial stability, wealth, and strong country’s position in the international space, as well as in facilitating the development of public and private business sectors at all levels, creation the favorable climate for foreign investment, etc. The crucial point of ensuring the transparency of banks for different stakeholders is the available information about existing financial risks valuated by Rating agencies.

Доступ до роботи тільки на території бібліотеки ОНЕУ, для переходу натисніть на посилання нижче
У роботі розглянуті теоретичні аспекти та сутність банківської конкуренції як економічної категорії. Наукові засади дослідження поняття «конкурентоспроможність банківських послуг». Сучасні підходи до оцінки конкурентоспроможності банківської установи. Оцінка фінансової дільності АТ «Південний». Аналіз конкурентних позицій АТ «Південний». Порівняльна характеристика конкурентоспроможності банківських послуг та продуктів АТ «Південний». Зарубіжний досвід щодо підвищення конкурентоспроможності банків. Напрями підвищення конкурентоспроможності банку АТ «Південний». Проаналізовано загальні та специфічні функції конкуренції. Порівняльна характеристика методів оцінки конкурентоспроможності банку. Оцінка стратегії діяльності банку АТ «Південний». Основні сервіси, які підтримують ІТ-проекти українських банків. Порівняльна характеристика показників банків. Пропозиції для впровадження українськими банками стратегій покращення конкурентоспроможності. The paper considers the theoretical aspects and the essence of banking competition as an economic category.
Scientific principles of research on the concept of "competitiveness of banking services". Modern approaches to assessing the competitiveness of a banking institution. Estimation of financial activity of JSC " Pivdenny". Analysis of competitive positions of JSC "Southern". Comparative characteristics of the competitiveness of banking services and products of JSC "Southern". Foreign experience in increasing the competitiveness of banks. Directions for increasing the competitiveness of the bank JSC "Pivdenny". General and specific functions of competition are analyzed. Comparative characteristics of methods for assessing the competitiveness of the bank. Evaluation of the strategy of the bank JSC " Pivdenny". The main services that support IT projects of Ukrainian banks. Proposals for Ukrainian banks to implement strategies to improve competitiveness.

У роботі досліджено об’єкт та інструменти для здійснення шахрайських операцій клієнтів банку. Проведений аналіз основних критеріїв оцінювання банківської операції як шахрайської. Розроблено прототип системи електронних платежів з реалізацією алгоритму перешкоджання здійсненню шахрайських операцій клієнтів банку. Основаною метою цього дослідження є розробка алгоритму для перешкоджання здійснення шахрайських операцій клієнтів банку.
The paper investigates the object and tools for carrying out fraudulent operations of bank's clients. An analysis of the main criteria for assessing a banking transaction as fraudulent was conducted. A prototype of the electronic payment system was developed based on the implementation of the algorithm of interfering with carrying out fraudulent operations of bank's clients. The purpose of this study is to develop an algorithm for preventing fraudulent operations of bank's clients.

В любой хозяйственной деятельности всегда существует реальность по- терь, вытекающих из специфики тех или иных хозяйственных операций, что наиболее характерно для банковских систем. Опасность таких потерь пред- ставляет собой экономические риски.

AbstractThis chapter introduces the reader to unconventional monetary policy, i.e. monetary policy using instruments going beyond the steering of short-term interest rates as described in the previous chapter. We start by providing the rationale of unconventional monetary policy, i.e. essentially pursuing an effective monetary policy when conventional policies are not able to provide the necessary monetary accommodation because of the zero lower bound. We then discuss negative interest rate policies, and explain why rates slightly below zero have proven to be feasible despite the existence of banknotes. We also discuss possible unintended side-effects of negative interest rates. We continue with a discussion of non-conventional credit operations: lengthening of their duration, the use of fixed-rate full allotment, the widening of the access of counterparties to the central bank’s credit operation, targeted operations, credit in foreign currency, and widening the collateral set. Finally, we turn to the purposes and effects of securities purchase programmes. We end the chapter by revisiting the classification of central bank instruments in three categories: conventional, unconventional, and lender of last resort.

The De Larosiére report initiating the establishment of the financial system of the European Union was published in the year following the global economic crisis of 2008, on 25 February 2009. Already in June of this year, the European Council accepted a document known as the Single Rulebook, which contains common rules related to the financial sector of the EU, however, the real break-through was achieved with the working paper accepted by the European Committee in December 2012, which initiated the establishment of the institutional system of the banking union. The individual elements of the system constituted by three pillars have been gradually developed, however, it is still not complete. The single banking supervising system started its operation in November 2014, the resolution mechanism in January 2016, however, the single deposit-guarantee system has not yet been established. The purpose of the study is to present the events of the recent 11 years, during which the currently known institutional system of the banking union was established.

Islamic banking is a banking system that is based on the principles of sharia or Islamic law. The principles of Islamic finance forbid interest - this is commonly known as riba - charity (zakat), forbid high risk (gharar), forbid some transactions like gambling, and are based on PLS (Profit-Loss Share). The most important concept is that both charging and receiving interest are strictly forbidden; money may not generate profits. Islamic banks have largely survived the global economic crisis intact and they offer a safer operation than conventional banks. CAMEL analysis is a supervisory rating system to classify a bank's overall condition according to Capital (C), Assets (A), Management (M), Earnings (E) and Liquidity (L). In the analysis a variety of indicators were calculated based on data from the annual reports. The results of the four banks were averaged separately, then classified (1 = good, 2 = adequate, 3 = satisfactory, 4 = acceptable, 5 = unacceptable) according to the desired criteria, the changes over the years and the relative values of the four banks.

The continuous growth of cyber security threats and attacks including the increasing sophistication of malware is impacting the security of critical infrastructure, industrial control systems, and Supervisory Control and Data Acquisition (SCADA) control systems. The reliable operation of modern infrastructures depends on computerized systems and SCADA systems. Since the emergence of Internet and World Wide Web technologies, these systems were integrated with business systems and became more exposed to cyber threats. There is a growing concern about the security and safety of the SCADA control systems. The Presidential Decision Directive 63 document established the framework to protect the critical infrastructure and the Presidential document of 2003, the National Strategy to Secure Cyberspace stated that securing SCADA systems is a national priority. The critical infrastructure includes telecommunication, transportation, energy, banking, finance, water supply, emergency services, government services, agriculture, and other fundamental systems and services that are critical to the security, economic prosperity, and social well-being of the public. The critical infrastructure is characterized by interdependencies (physical, cyber, geographic, and logical) and complexity (collections of interacting components). Therefore, information security management principles and processes need to be applied to SCADA systems without exception. Critical infrastructure disruptions can directly and indirectly affect other infrastructures, impact large geographic regions, and send ripples throughout the national and global economy. For example, under normal operating conditions, the electric power infrastructure requires fuels (natural gas and petroleum), transportation, water, banking and finance, telecommunication, and SCADA systems for monitoring and control.

Databases are a cornerstone for the operation of many services, such as banking, web stores and even health care. The cost of maintaining such a large collection of data on-premise is high, and the cloud can be used to share computational resources and mitigate this problem. Unfortunately, a great amount of data may be private or confidential, thus requiring to be protected from both internal and external agents. Moreover, this data needs to be manipulated to provide useful information to its owner. In this dissertation, we propose modifications to CryptDB, a state-of-the-art encrypted cloud database, aiming to enhance its efficiency, flexibility and security; this is accomplished by improving or changing its underlying cryptographic primitives.

A numerical, two-dimensional hydrodynamic model of the Mississippi River, from Thebes, IL, to Tiptonville, TN (128 miles/206 km), was developed using the Adaptive Hydraulics model. The study objective assessed current patterns and flow distributions and their possible impacts on navigation due to Birds Point New Madrid Floodway (BPNMF) operations and the Len Small (LS) levee break. The model was calibrated to stage, discharge, and velocity data for the 2011, 2015–2016, and 2017 floods. The calibrated model was used to run four scenarios, with the BPNMF and the LS breach alternately active/open and inactive/closed. Effects from the LS breach being open are increased river velocities upstream of the breach, decreased velocities from the breach to Thompson Landing, no effects on velocity below the confluence, and cross-current velocities greater than 3.28 ft/s (1.0 m/s) within 1186.8 ft (60 m) of the bankline revetment. Effects from BPNMF operation are increased river velocities above the confluence, decreased velocities from the BPNMF upper inflow crevasse (Upper Fuseplug) to New Madrid, cross-current velocities greater than 1.5 ft/s (0.5 m/s) only near the right bank where flow re-enters the river from the BPNMF lower inflow/outflow crevasse Number 2 (Lower Fuseplug) and St. Johns Bayou.

Mobile wallets replicate physical wallets on a mobile device, in which users can store different payment instruments (e.g., cards, transfers) to make mobile payments. As the mobile wallet is adopted, a mobile payment scheme emerges, with its users as elements in a network of transfers. In this article, I study the mobile payment scheme of Movii— the first fintech firm in Colombia operating under a financial non-banking license for electronic deposits and payments. Based on a unique dataset of bilateral transfers between Movii’s mobile wallet users, I build, visualize and analyze Movii’s network, daily from November 18, 2017, to November 25, 2020. Besides the anticipated increase in the number of users and the value of transfers, the visual and quantitative complexity of the network of transfers increases over time. This increase in complexity is likely to be linked to the adoption of Movii’s mobile wallet, which results in users finding new ways to use mobile payments beyond person-to-person transfers, including person-to-business and business-to-business. Also, results suggest the Covid-19 pandemic accelerated the evolution of Movii’s mobile payments scheme.

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%.