23  The ratio’s numerator (CET1) and denominator (risk-weighted assets (RWAs)) recorded similar declines (0.9% for CET1 and 1.1% for RWAs), so the ratio rose by barely 2 bp to 13.3% at end-2021. 11  The increase in the ratio between 2019 and 2020 was broad-based across banks. The distribution of the CET1 ratio in 2021 reflected convergence towards the central values of the distribution. Thus, solvency levels have increased at banks whose levels were lower and have decreased at banks whose levels were higher. To sum up, the Spanish banking industry has proved resilient to the economic crisis triggered by the pandemic, maintaining the supply of credit to the private sector and a correct solvency level. It has also been able to swiftly recover its profitability. Yet given the high level of uncertainty and the scale of the potential risks on the horizon, close monitoring of risk and prudent behaviour by banks remains particularly necessary. I will now move on to discuss the risks that lie ahead. Impact of the potential materialisation of the risks identified following Russia’s invasion of Ukraine  Russia’s invasion of Ukraine has triggered geopolitical tensions of uncertain severity and duration. The two main channels through which the conflict may have a significant economic impact are: first, the surge in energy and other commodity prices, with its accelerator effect on inflation and penalising effect on economic activity; and second, the negative impact of the war on world trade, business and household confidence, and financial uncertainty.

Financial awareness supports a more rational decision-making process for individuals by improving their literacy against financial risks. Increasing financial literacy will contribute to the more efficient functioning of financial markets, enhancement of financial stability and consequently the social welfare by increasing productivity in the overall economy. Therefore, financial education assumes importance not only for individuals but also for giving depth to the financial system and improving market efficiency. Parallel to increased financial literacy, the volume and variety of information sought by individuals from financial institutions will also increase. This will, in turn, lead to more transparency in financial markets. Besides, consumers’ demands for products and services that meet their needs will enable the development of creative, innovative and competitive financial products and services in financial markets. Moreover, financial education will lead to an increase in the individuals’ propensity to save and create a more efficient social security system. Higher rates of savings will have favorable effects on investment and growth and contribute to economic development and financial stability. I would like to especially underline that financial education is not an abstract concept. As a matter of fact, we clearly witnessed the close relationship between financial education and financial stability in the recent global crisis. I believe that the awareness created by this crisis can be interpreted as an opportunity, as highlighting financial education will be beneficial for policy-makers, individuals and financial markets. In Turkey, many institutions carry out projects with regard to financial education as a part of their responsibilities.