27. 11. 2020 opening address of the 19th conference – club de gestion de riesgos de espana margarita delgado deputy governor introduction many thanks to the risk management club for their kind invitation to open this annual conference. we are now into its nineteenth edition that, inevitably, will focus on the new challenges in the aftermath of covid - 19. the title of this conference refers to the “ new world ” that will be awaiting us after overcoming the crisis caused by the pandemic. needless to say, we all wish that this happens as soon as possible. it may seem a little excessive to talk of a “ new world ” after the pandemic, but i believe to some extent it will be. we should remember that crises are periods of change, in which what is established is called into question. each crisis is certainly different from previous ones. or rather it should be different, at least if we supervisors, regulators and banks learn from the past and avoid making the same mistakes. in any event, it seems we have now been hearing the word “ crisis ” more than ever for over a decade. until relatively recently, when we referred to “ the crisis ” we had the global financial crisis in mind. now, sadly, we must clarify which crisis we are talking about. it could be said that the society we live in may be the result of how we have tackled and resolved each of the crises we have faced. with effort and sacrifice our society has overcome problematic situations, some not so distant in time. and the pandemic will certainly be no exception. as in other previous crises, it is vital that we should be able to draw lessons allowing us to improve those aspects that have fallen short, that have not worked as foreseen or that need to be strengthened. naturally, this need to draw lessons applies to banking regulation, but also to health, social insurance and economic aspects that have evidenced shortcomings. as you know, the banking supervisory and regulatory frameworks were overhauled to include the lessons we learned from the previous financial crisis. while unrelated, we could say that the situation caused by covid is the first test for this global reform and, almost inevitably, we will be assessing the functioning of the different components of the new framework after facing this global, exogenous, severe and totally unexpected shock. let me begin with a very swift reference to the supervisory framework. i believe we will all agree that the launch of the single supervisory mechanism ( ss

of the merger at caixabank. fourth, the cost - to - income ratio13 worsened slightly in 2021, affected by the extraordinary restructuring costs recorded at several significant banks, although it remains lower ( better ) than that of the european peers. in recent years the spanish banking industry ’ s operating capacity has converged towards average european values, against a backdrop of branch closures and staff reductions in the main european countries. thus, at december 2020, the number of branches per 100, 000 inhabitants in spain was 47, a figure similar to that of the french banking system and close to that of the italian one, 14 although spain ’ s population density is lower. between 2008 and 2020 the number of branches was cut by more than 50 %, while staff reductions, albeit lower, were also significant ( close to 40 % ). in both cases, these are the second highest cuts among the main european countries. 15 branch closures have been comparatively higher in urban areas with higher population growth. 16 the cost - to - income ratio is defined as the ratio of operating expenses to gross income, such that higher ( lower ) values denote lower ( higher ) efficiency. in 2008, there were 100 branches per 100, 000 inhabitants in spain, compared with around 60 in france and italy ( data as at december 2020, which are the latest data available with comparable ecb information for the different european countries ). second only to the netherlands. in spain branch closures have affected municipalities of all sizes, albeit with slightly more cuts in larger ones ( around 56 % since 2008 for municipalities with more than 50, 000 inhabitants ) and fewer in smaller ones ( around 40 % for those with fewer than 5, 000 inhabitants ). the smaller municipalities are the only ones where the population declined in this period, in keeping with the demographic decline in spain ’ s rural areas in recent decades. fifth, as regards the cost of bank funding, in the money markets secured interest rates stand at historically low levels. but wholesale market funding costs have risen, on expectations of a less accommodative monetary policy and the uncertainty prompted by the crisis in ukraine. indeed, expectations of interest rate rises have fed through to wholesale market interest rates on long - term bank debt ( a measure of funding costs ) more robustly than to the overnight index swap ( ois ) rate. 17 thus, banks ’ credit risk spread has widened. there were mixed developments in the cost of new issuances in 2021 across instrument types and issuers