, respectively, of risk - weighted assets. while there is heterogeneity across banks, these results highlight, first, that banks have faced this crisis with bigger safety margins. further, the results show the effectiveness of the measures implemented to date to mitigate the impact of the crisis. banking sector resilience must be maintained during the crisis there is no room for complacency with this initial, positive diagnosis. as we all know, the scale of this shock is very high. even given the horizon resulting from the distribution of vaccines, we know that the duration of the crisis is uncertain, as we have seen with the emergence since last autumn of fresh outbreaks of the virus practically worldwide. to date, the crisis caused by the pandemic has considerably impacted non - financial corporations ’ profits and household income, and has impaired their solvency. however, we have not seen any increase in non - performing loans, due largely to the wide range of measures the various authorities have adopted. the ultimate impact of the crisis on the banking industry will indeed hinge on its scale and duration, but also on the effectiveness of economic policies in alleviating its effects on households and firms. in this respect, in the current situation of incomplete, uncertain and uneven economic recovery, retaining a large part of the exceptional measures to support the economy is warranted, in particular for certain sectors. in any event, projections suggest that there will be a significant increase in the ratio of nonperforming loans in the coming quarters, even under the most benign scenario. against this backdrop, i have three important considerations to make with a view to maintaining the sector ’ s resilience in the coming months, beyond keeping the extraordinary measures in place. firstly, much of the downturn in banks ’ results in the first three quarters of 2020 was due to greater provisioning in anticipation of future asset impairment, which has still not materialised but which will do so in the coming quarters. specifically, spanish banks have increased their provisioning by 75 % in the first nine months of 2020 compared with the same period a year earlier. sustaining this effort in the coming quarters would enable the bulk of provisioning needs anticipated by the stress tests under the most likely scenario for this and the coming year to be met. this has led to a significant decline in banks ’ profitability, but it has also raised their loss absorption capacity, something which investors should particularly value in these circumstances. the message i wish to convey is that

banks should persist with their early recognition policy, as this will enable them to continue to fulfil their task of providing funding to the economy. it is important that banks analyse situations individually, distinguishing between temporary and more permanent effects. automatic reclassifications that result in excessively procyclical behaviour should be avoided. however, above all, banks must be prudent, assessing provisioning needs in accordance with plausible and conservative scenarios for the coming years. in short, especially should the crisis be prolonged, banks must ensure timely and proper recognition of the effective quality impairment of their credit exposures in compliance with the supervisory guidelines. secondly, i wish to refer to the capital buffers built up and their use during this crisis. as i mentioned earlier, solvency levels are now significantly higher than in the run - up to the global financial crisis. at the start of this crisis, prudential supervisors decided to release many macroprudential buffers – the capital, countercyclical and systemic risk buffers – and, at the same time, the microprudential authority temporarily allowed banks to operate below the level set for certain structural requirements. these decisions sought to help banks continue to provide the financing that households and firms need in such an adverse environment as the present one. our empirical analysis shows that the use of these buffers will enable banks to provide more funding to the real economy. this in turn has a positive impact on economic growth, encouraging its recovery or moderating its decline. and this positive impact is such that it, in turn, boosts credit demand and banks ’ income, which ultimately translates into higher solvency levels. in any event, it is important to note that it may be difficult for banks to use buffers if they fear they may be penalised by the financial markets for reaching certain capital ratios, which would increase their funding costs and could, therefore, affect their solvency levels. this market stigma effect could lead banks to avoid using capital buffers, which in accordance with the above analysis would have a negative impact on the economy. 1 in addition, the use of these capital buffers may be more difficult if there are doubts about how they will be rebuilt post - crisis. the difficulty would be if banks were obliged to rebuild the buffers at a time when their capacity to generate profit was only modest or when the market might not be very receptive. in this setting, clear communication by the macroprudential and microprudential