key is [ to make ] the reference to asia - although it is very, very hard to refer to it - as a single entity. but we, i think, can work together, and this diversity actually presents a lot of opportunities, just as it is fraught with challenges. 1 / 2 bis - central bankers'speeches where all these put us is that we face a lot of interlinked uncertainties at both regional and global levels. these affect all of us. one can easily make the case that global disruptions require global solutions. but as any economist knows, the bigger the group, the harder it is for collective action to be rational. [ we can refer to ] the famous [ kenneth ] arrow impossibility theorem : " individually rational people are not necessarily collectively rational. " they prefer a to b, or b to c, and c to a. welcome, all of you. i look forward to a very fruitful conference. thank you for coming, and i hope you enjoy your stay here in mactan. let me turn the floor over to [ reserve bank of india ] deputy governor [ rajeshwar ] rao. 2 / 2 bis - central bankers'speeches

this drives up inflation and, consequently, accelerates the monetary policy response. it also entails a worsening of financial conditions. 31 under the severe scenario, the price shocks are slightly more significant than under the adverse one, but the main difference is the inclusion of a more marked worsening of households ’ and firms ’ confidence, which causes further falls in the main domestic demand variables ( consumption and investment ). 32 the adverse scenarios for the foreign economies that are important to spanish banks are calibrated so that their severity is consistent with the impact of the shocks on the spanish economy. these scenarios thus enable a rigorous analysis of the banking sector ’ s resilience to the risks deriving from the current geopolitical setting. specifically, further increases in the sovereign risk premium and the spreads in bank lending to households and firms, and a decrease in the value of the assets that make up household wealth, with substantial falls in stock prices and house prices. inflation rises by up to an additional 3. 2 pp in average year - on - year terms in 2022 - 2023 under the adverse scenario and by up to an additional 3. 6 pp under the severe scenario. gdp growth slows, by an average of 2. 8 pp under the adverse scenario and 5. 4 pp under the severe scenario. the impact on average growth in house prices is - 5. 4 pp and - 8. 6 pp, respectively. as for interest rates, the increase in short - term rates is larger under the adverse scenario ( 2. 2 pp for 12 - month euribor ) and smaller under the severe scenario ( 0. 9 pp ) on account of weaker demand. there is a notable increase in long - term rates under both scenarios, with the average 10 - year sovereign bond yield climbing by 2. 6 pp and 3 pp, respectively. overall, the adverse scenario entails a negative impact of 1. 8 pp on the aggregate cet1 ratio of spanish banks ; this impact rises to 3 pp under the severe scenario. by components, the largest adverse impact would be on credit quality, leading to greater losses on loans to the private sector in business in spain and a sovereign bond value adjustment. there would also be a lower generation of funds. in turn, the lesser need for new provisioning ( owing to the greater use of existing provisions ), deleveraging at banks and more enforcement of guarantees to meet the expected credit losses associated with ico - backed loans, would mitigate the fall