السلام عليكم ورحمة الله وبركاته بسم الله الرحمن الرحيم In the name of Allah سبحانه وتعالى Most gracious, most merciful الحمد لله رب العالمين والصلاة والسلام على المبعوث رحمة للعالمين نبينا محمد وعلى آله وصحابه والتابعين ومن تبعهم بإحسان إلى يوم الدين وبعد We praise Allah سبحانه وتعالى We send blessings and salutations upon the one who was sent to mankind as a mercy محمد صلى الله عليه وسلم his companions, his household may Allah سبحانه وتعالى bless all those who followed with or in goodness right up to the end and may we be included in that and our offspring Amin my brothers, my sisters the supplications of Rasul الله صلى الله عليه وسلم are amazing they are amazing they are so relevant in our lives where we see we are suffering from laziness anxiety we have the same concerns regarding being engulfed by debt being overtaken by an enemy etc. and the Prophet صلى الله عليه وسلم made all these du'a or supplications and we have it literally given to us on a plate سبحان الله on a platter and we still don't make use of these beautiful blessed words so Insha'Allah the idea of this entire series is to conscientize us regarding these beautiful supplications and for us to be able to learn them put them into practice call out to Allah and like I've said in several of these episodes even if you have not yet memorized the Arabic start saying this in English or in any other language and Allah سبحانه وتعالى will open your doors the Hadith that I'd like to start off with today is the Hadith of Aisha رضي الله عنها where in she says the Prophet صلى الله عليه وسلم used to say اللهم إني أعوذ بك من الكسل والهرم والمأثم والمغرم ومن فتنة القبري وعذاب القبري ومن فتنة النار وعذاب النار ومن شر فتنة الغنا وأعوذ بك من فتنة الفقري وأعوذ بك من فتنة المسيح الدجال اللهم اللهم مغسل عني خطايايا بماء بماء الثلجي والبردي ونقق قلب من الخطايا كما نقيت الثوب الأبيض من الدنس وباعد بيني وبين خطايايا كما باعدت بين المشرق والمغرب سبحان الله فوق الأعمال this has been passed on him ما هو قو matteum So he meaning of this du A is Oh Allah I seek your protection from laziness and from old age and I seek your protection from sin so protect me from sinning and I seek your protection from debt you know debt meaning owing people money and this brings me to a very interesting factor أن تستطيع أن تذهب عن الناس when we don't really need. It's only when you're in a dire need that you actually are allowed to go and ask people, I can't manage, I can't cope, I need to borrow some money, please can you give me some money, I will give it back to you etc. But if you're just going to ask the people when you don't really need then Allah is not going to help you to pay back because it becomes a bad habit. People want to live beyond their means. May Allah SWT make us from those who understand, those who can budget correctly when we actually are spending. So oh Allah, I seek your protection from laziness, from old age, from sin and from debt. And I seek your protection from the trials of the grave and the punishment of the grave. Two things I made mention of. The trials of the grave and the punishment of the grave. And I seek your protection from the trials of the fire and from the punishment of the fire. It's amazing how there are trials of the fire and there is punishment of the fire. And I seek your protection from the harms of wealth. Amazing. From the harm of being wealthy. What could that be? Arrogance, hortiness, a person who has become so bad in qualities and character because of the money, wastefulness, extravagance, all those are sins of being wealthy. So the Prophet SAW is asking Allah SWT to protect him from the evil of the trials of being wealthy. The bad habits that come with wealth. Subhanallah. The bad that comes with wealth. And the evil of the trials of wealth also may include the jealousy of others, the envy of others. Oh Allah, protect me from all of that. Because I've got people become jealous, envious, they want to harm, they want to falsely accuse, etc. All of that. Oh Allah, protect me from it. Oh Allah, I seek your protection from the harmful trials of wealth. Subhanallah. Amazing. It's amazing how it's worded. Because it's something that's even difficult to explain in the English language or in another language. It's unique. It's the gift of the Prophet SAW of a few words having deep understanding and having deep rich meaning. Then he says And I seek protection in you from the trials and difficulties of poverty. Look at how he made a dua to protect him from the evil of wealth. The evils of being wealthy. And then he says and from the trials of being poor. Both the duas are here. No one can say he missed something out. Because he is saying, oh Allah, protect me from poverty. And protect me if I were to be given wealth from the harm that that wealth comes with. Subhanallah. Amazing. Amazing. These words, they bring tears to the eyes because we think of how the Prophet SAW He didn't really need all of this. But he called out to Allah. He called out to Allah. How much do we call out to Allah? How much do we call out to Allah? Have you ever said? Have I ever said, oh Allah, protect me from the evil that will come with wealth? I can be honest with you. Beside from the حديث and reading the حديث and going through the حديث. I cannot remember actually calling out to Allah. Subhanallah. But now I'm going to become more conscious of it. And I invite you all to become more conscious of it. Oh Allah, protect me from the evil and the trials of wealth and being wealthy. I may not be wealthy right now. But the money that comes into my pocket. Subhanallah. Do you know, some things come to my mind right now. When we have wealth, we have to pay zakah. Zakah is compulsory. You have to give a certain percentage. When that wealth becomes so much, Shaytan can come to you and start making you miscalculate. Or try to say, no, I don't have to give so much and this and that. Because it becomes difficult. When the figure becomes huge, the percentage is the same. But the figure becomes more difficult to give. Imagine 2.5% of 100 is only 2.5 pounds or 2.5 dollars. But 2.5% of 100 million is what? Subhanallah. Are you ready to give that? May Allah make it easy for us. So these are some of the trials of wealth that the Prophet is asking Allah to protect him from. And what about us? We ask Allah to grant us wealth, to grant us sustenance, to make us rich. But we forget to ask Him. Oh Allah, protect us from the evil that's going to come with that. Protect us from the evil that might come with it. And that does come generally with wealth. So this is the beauty of the wording of the Prophet ﷺ. He says, firstly, he says, oh Allah, protect me from the evil of the trials of wealth. And then he says, oh Allah, protect me from the trials of poverty as well. Poverty comes with a lot of trials. Subhanallah. May Allah grant all those who are struggling financially. May He grant them ease and sustenance. May He bless every one of us with beautiful sustenance that is pure and that we will be able to use in his obedience and not in his disobedience. Amen. Then the dua continues. And I seek your protection from the trials and tribulations of the false messiah. Of Ad-Dajjal. The Jal is whom we know we've heard of in the Hadith of the Prophet ﷺ.  The Prophet ﷺ used to make dua to Allah to protect him from the trials and tribulations of that false messiah. Which means that the Jal. May Allah ﷻ protect us from him and protect us from all the fitna that surrounds him. When he comes, he will come with a few things. He will say he is the Lord and the God. Whoever believes that he is not the Lord and the God shall be harmed. Probably killed. He will say that he owns sustenance.  He will provide for you.  He will come with so much of trials and tribulations. He believes and he will say that he is the one who actually controls the produce and the rain, etc.  So those are the trials and tribulations of Al-Masi-Haddajal as well. At any time when you have a person or when you have a force that happens to be calling in the same direction, they will be considered a force that is a devilish force with this impact. We are asking Allah ﷻ to protect us from. May Allah ﷻ protect us from that. May he make it easy for us to worship him. To worship him. Meaning Allah ﷻ and Allah ﷻ alone. Amen. Then the Prophet ﷺ said. Wash away from me my sins. And the Prophet ﷺ had no sins. So he is saying. Oh Allah ﷻ wash away from me my sins. With the water of ice and snow, سبحان الله. You know, the hailstones we have, the ice we have, the snow we have. All this cold, cold water. Why is it that when the sins are being spoken about, then ice and snow is used to refer to the washing away of the sins? Because the sins have a heat. The heat of the punishment of Allah ﷻ. When you commit a sin, there is heat. There is heat to the sin. So you are saying. Oh Allah ﷻ, cool me down. Calm me down. Let me not commit sin and wash my sins away in this, with that cold icy water that is filled with, you know, برد and ثلج. The ice, the hail, the snow, سبحان الله. مير الله سبحانه وتعالى. واشا و سنز away. This is a beautiful dua. اللهم مغسل عني خطا يايا بما إيثلج والبرد. This is one wording. It's a hadith which is متفق علي. But there are other wordings as well where اللهم, there are different, you know, words used and the order is slightly different. But this meaning is quite much the same. And then the hadith continues. و نقلبي من الخطايا. Or Allah ﷻ, purify my heart from the sins. The effects of the sins. Purify my heart from the effects of the sins. كما نقيت ثوب الأبيض من الدنس. In the same way that you purified the white clothing from impurity. From impurity. From dirt. You know when you have something white, it has dirt and it's washed. It's washed in a beautiful way with detergent and what have you. And then you see it's so white. So Allah ﷻ is being asked saying, Oh Allah, wash my heart. Cleanse my heart from sin.  و باعد بيني و بين خطا يايا كما باعدت بين المشرق والمغرب. Oh Allah, create a distance between me and my sins. In the same way that you have created the distance between the east and the west. سبحان الله. That's an amazing du'a. Oh Allah, distance. Create a distance between me and my sins. In the same way you created the distance between the east and the west. Make me from among those whom you've wiped the sins out. You've made everyone and everything. Forget about them and you've kept a distance between me and those sins. Whenever there is a sin to be committed, distance me from that sin. Whenever there is something bad, harmful, create an obstacle so that I don't commit that sin. And whatever I have done, purify me, cleanse me in the same way that white cloth is cleansed and make me from among those who is pure, pure once again. Create a distance such that I don't even think of those sins again. May Allah SWT protect us from sin and grant us what the Prophet SAW is asking him in this beautiful hadith of Aisha. رضي الله عنها which is متفق عليه. So when we start our Salah, there is something called al-istiftaah which is a du'a that commences the Salah. Generally we say سبحانك اللهم وبحمدك وتبارك اسمك وتعالى جدك ولا إله غيرك. You know we praising Allah SWT declaring His greatness, His loftiness, His status and asking Allah SWT saying that there is none worthy of worship besides Him. And then we continue with our Salah. One of the du'as is also this. اللهم بعيد بيني وبين خطاياية كما باعدت بين المشرق والمغرب. Oh Allah create a distance between myself and my sins in the same way that you have created the distance between the east and the west which means make me far away from my sins. May Allah SWT bless us all and grant us ease and give us from this beautiful du'a. Just to recap quickly before we move on to the next du'a. This du'a is the du'a of عيشة رضي الله عنها. She says the Prophet SAW used to say oh Allah protect me from kasal, laziness, haram, old age, ma'tham, sins, ma'hram, debt. فتنة القبر وعذاب القبر the trials of the grave and the punishment of the grave. فتنة النار وعذاب النار the trials of the fire and the punishment of the fire. ومين شر فتنة الغنة and the evil trials of wealth and rich and being rich. وعود بك من فتنة الفقري and I seek protection from you oh Allah. I seek protection in you from the trials of being poor or poverty. وعود بك من فتنة المسيح الدجال and I seek protection in you from the trials of the مسيح الدجال the false messiah the one I devil as we call him and الله مرس العني خطايايا oh Allah wash away my sins with cold icy snowy water سبحان الله سبحان الله that's amazing and like I explained why ice and why cold because the sins have a heat and that heat needs to be extinguished it calms you down you're saying oh Allah the sin that I that the heat keeps making me go back to wash me wash that away from me with cold water so I'm calm I'm relaxed there's no longer that heat to make me commit the sin سبحان الله it's amazing the wording is absolutely superb it's absolutely superb the explanation of it by the محديثين is something mind boggling but I've just touched on it and then the last part of it oh Allah you know cleanse my heart from sin in the same way you cleanse the white cloth or the white clothing from impurity and distance create a distance between me and my sins in the same way that you have created the distance between the east and the west amazing دعاء of the Prophet صلى الله عليه وسلم I want to move on to another دعاء which is also very very powerful it's a hadith of Abu Huraira رضي الله عنه he says the Prophet صلى الله عليه وسلم said تعود بالله seek the protection of Allah so this is an instruction of the Prophet to all of us seek the protection of Allah from the following من جهد البلاء ودرك الشقائي وسوء القضائي وشماتة الأهداي it's just amazing how the Prophet صلى الله عليه وسلم is speaking about it جهد البلاء oh Allah he's asking us to seek the protection of protection in Allah from so we are seeking the protection of Allah from the following جهد البلاء you know the بلاء meaning difficulties hardship the difficulties of the trials the difficulties of the trials ودرك الشقاء and شقاء is the opposite of سعادة سعادة is happiness so sadness you know that sadness overtakes us the destruction the destruction that comes with it وسوء القضاء and bad destiny you know make the destiny that you've destined for us good we seek your protection from the evil of the destiny the evil of destiny we want you to take us to a good place we want you to have destined for us goodness so protect us from the evil of that destiny وشماتة الأهدا and the enemies being given the opportunity to laugh at us سبحان الله you know sometimes something happens I give you a typical example of children you just had a little fight with someone and as you're walking away having been victorious you trip and everyone laughs at you that's شماتة الأهدا that's a simple way of explaining it to say something happened to you that made the enemies just laugh to say wow look you it serves you right so to speak so we are asking Allah سبحانه وتعالى to protect us from the turning of that in such a way that the enemies are given the opportunity to laugh at us and this is why the hadith of ابن عمر رضي الله عنهما he says the prophet ﷺ used to say اللهم إني أعوذ بك من زوالي نعمتك oh Allah I seek protection I seek protection in you from the departure of the gifts that you've given me the boons what you've bestowed upon me Allah gives us gifts sometimes he takes it away oh Allah don't take away my gifts don't take away what you've given me what you've bestowed upon me اللهم إني أعوذ بك من زوالي نعمتك oh Allah I seek your protection from the gifts you've bestowed upon us being taken away what is the نعمة إيمان إسلام your wealth your health your family whatever else Allah has given you a lot of us are guilty of not asking Allah for protection from taking all that away it's sad so Allah سبحانه وتعالى is telling us through the blessed lips of Muhammad صلى الله عليه وسلم to call out to him to say oh Allah I seek your protection from taking away these gifts that you've bestowed upon me what تحولي عافية and the turning of the the good health that you've given me the purity that you've given me the chastity that you've given me whatever goodness you've given me oh Allah don't let it turn around you know things can happen suddenly and that's why the last part of the hadith says the دعاء وفجاءة نقمتك you know oh Allah don't let the retribution come suddenly you know you do a bad deed you want a little bit of time to repent to Allah سبحانه وتعالى you don't want the punishment to descend immediately so you ask Allah oh Allah delay me a little bit you know meaning don't let the retribution come instantly may Allah سبحانه وتعالى never take away the goodness that he's bestowed upon us may Allah سبحانه وتعالى never ever punish us immediately upon a sin that we commit but rather may he give us time to repent may we be from among those who repent quickly and Allah سبحانه وتعالى here is also addressing us because obviously it's in the form of a دعاء it's from the lips of Muhammad صلى الله عليه وسلم he said this دعاء he used to use he used to use these words اللهم اني اعود بك من زوال نعمتك وتحول عافيتك وفجاءة نقمتك وجميع سخطك and oh Allah I seek your protection from all of your anger anything that makes you upset and angry oh Allah protect me from that may Allah سبحانه وتعالى grant us goodness my brothers my sisters look at these words imagine if Allah were to suddenly and quickly and immediately punish us for what we did that was wrong we would never have had any hope of survival because the type of deeds we do we are so embarrassed of them that we hide away from other human beings who are not even accountable for our accounts we hide away from them but we don't realize the one whom we are going to be giving that entire account to is Allah سبحانه وتعالى and this is the Allah whom we actually sometimes think that we can get away from may Allah سبحانه وتعالى have mercy on us may Allah open our doors may Allah grant us goodness may Allah protect us from our good deeds being taken away may Allah protect us from the goodness that He has given us being taken away may Allah protect us from evil befalling us may Allah protect us from the health and the wealth that He has given us being taken away and may Allah سبحانه وتعالى protect us from doing deeds that would displease Him in any way my brothers and sisters I look forward to the next episode of this beautiful series until then I say السلام عليكم ورحمة


Yeah, thanks. Thanks a lot. And then we move quickly to the last paper and I would in mind present a discussant to be also very sharp in time because we are a little bit behind. This paper will be presented by Anastautowicz from the ECB. Thanks to the organizer for reminding us here to the conference and it's a pleasure to be here and thanks also to the scientific committee for selecting our paper. I will be presenting a joint work with Leonardo Gamba Corta from the BIS and Alessio Reggietta from the ECB. The paper is entitled the supervisory policy stimulus evidence from the Euraira and recommendation. And yes, still disclaimer for me. The views expressed here in this paper are of course of the authors and do not necessarily reflect the BIS or the ECB views. It's not full screen. I don't know if it has to be full screen, but anyway. The COVID-19 pandemic has prompted governments and central banks to implement innovative policy solutions. One of the main innovation was the introduction of the policy to restrict dividend distributions. In Europe on 27th March 2020, the banking supervision arm of the ECB adopted the recommendation asking but not obliging banks to refrain from dividend distributions. The objective of the recommendation was to ensure that credit institutions will continue to fund the small and medium enterprises and strengthen their capacity to absorb losses. To our knowledge, this is an unprecedented policy. It is the first type of supervisory policy that restricts dividends that at least recommends banks to not pay out dividends. A bit of the literature background, in restricting dividend payments, there are of course caveats to be kept in mind. Public policy must be crucial not to create unintended additional distortions that exceed the benefits of restrictions. It is worth pointing out that dividend restrictions can have also negative effects on banks. The first one that comes to mind, of course, is the stock price effect. And there is evidence on that. Those negative effects are generally, however short lived. The stock price is still maintained. A mean reverting behavior. And this can suggest that initial market reaction can be excessive. At the same time, the idea of restricting dividend payments to support lending is not new. Literature has already argued in that front and argued for banking sector-wide dividend restrictions in crisis. While dividends represent the legitimate distribution of profits to shareholders and normally play an important role of allocation of capital between savings and investments, empirical evidence suggests that in times of crisis banks tend to expand dividend distributions instead of reducing them. This is this as a signaling device, but this also implies that they act prosyclically. Finding a balance is not easy, of course. And in crisis, however, supervised intervention can be justified on those fronts. The next slide shows you the dividend capital allocation of the banks, managers, and some insights on what we see in the data. Bank managers face a choice of capital allocation when deciding to follow the ECB recommendation. On the one hand, they may talk to use surplus capital to increase lending supply, thus supporting the economy and acting consyclically. This seems to be confirmed in our data. The chart shows you the spike of not distributed dividends following the ECB recommendation and the spike in lending in March after March 2020. On the one hand, bank managers, however, can still decide to signal and increase their resilience to future shocks by saving capital or strengthening their loss of social capacity, setting aside low-loss provisions. In short, the impact of the dividend recommendation on lending is not given and different things have to be considered. What we do in this study, we try to estimate the impact on lending growth to non-financial corporates, first and foremost, and then we try to investigate also how these credit allocation across firms have changed. We look at vulnerable and invulnerable sectors in the economy and those more affected or less affected by COVID. Finally, we look at the riskier behavior by banks and if there is any. Our data, the dividend data that we have are coming from the SSM or ECB supervisory banking supervision survey that was held, that was conducted in March 2020. The chart shows the aggregate figures from dividend distribution plans and intuitively shows that the banks payout ratio out of fiscal year 2019 earnings is 45%. However, if the condition on banks that have positive dividend plans, this ratio goes to 57%. What can be seen is that the middle yellow bar is the 27.6 billion of 2019 dividend retentions. These dividends are the ones that are the focus of our paper and that were a bit held following the ECB recommendation. In terms of regulatory capital, this amount could be read as an additional release of 33 basis points of CAT1 capital that banks can use to provide credit supply, capital increase, or loan loss provisions. Identification. So this slide briefly guides you through the identification that we exploit in this paper. Our main variable of interest is the non-dividend, not distributed dividends planned, but not distributed dividends over risk-related assets. This is basically the measure of the intensity of treatment. The chart shows that the distribution of this variable in the baseline sample and there is a spike at zero. It's around 40% of observations which refer to our control group. This is formed by two types of banks, banks that did not have any plan to distribute dividends and banks that distributed all that they planned to distribute before the March 2020 recommendation. Then we have the remaining 60% of observations that are distributed across this chart and they refer to our treatment group. Those are the banks that follow the ECB and did not distribute their dividends. For identification, we then rely on different features, but the most important ones is that we take the survey prior to the ECB recommendation that took place, which means that self-selection issues and the genetic issues that may follow after the period are kept in check or at least the biases in our estimates can be kept in check. And of course, the COVID pandemic is widely recognized as exogenous shock to the economy and therefore also the dividend recommendation by the ECB could not have been anticipated by the banks. Then secondly, the decision on dividends is predetermined to the COVID shock and to the dividend recommendation and the dividend recommendation will not affect those. And finally, the econometric framework, we rely on credit registry data to isolate firm demand effects. And to this end, we use the unaccredited credit registry data of the Euro area. And this allows to control for an unobserved heterogeneity credit demand at firm level. And in extreme synthesis, we do what the rest of the literature does here is comparing two banks lending to the same firm with banks being differently affected by the dividend recommendation, some of them being more and some of them less. To do a correct estimate, or at least to try to do a correct estimate, we need to focus also on the confounding effects that are happening at the same time, different type of policies, fiscal monetary potential policies have been implemented at the same time of the dividend recommendation. So keeping in check those is not easy. We try to do our best by collecting the data that we have here at disposal at ECB and we focus in particular on fiscal policy measures, monetary policy measures, and potential policies. On the left hand side chart, with respect to fiscal policies, we control for government guarantees, the blue line, moratorium debt repayments, the red line, which both aimed at support credit during the COVID crisis. As you can see, all of those variables spike at the same time. We then include in the model measures of unconventional monetary policies, the asset purchase programs and the TLTROs, which at the same time as well were enacted by the ECB. On the right hand side chart instead shows the fall in off-balance sheets, off-balance sheet exposures, which are mostly credit lines in blue. As you might know, credit line drawdowns were one of the main sources of credit for NFCs during the early phase of the pandemic, and when they are drawn, they are automatically moved to balance sheet, increasing lending mechanically. We add in the second control set order to measures of potential policies, namely the combined buffer requirement and the P2G releases, which have been touched upon earlier. This chart shows the first results of our paper. In columns one and two, we have the baseline, where we see that the positive relationship between non-distributed dividends and the credit growth. More specifically, one percentage point increase of non-distributed dividends over risk-weighted assets is associated with additional lending growth of 4.3 percentage points. To understand the economic significance of these effects, we note that conditional on treated banks, the average ratio of non-distributed dividends over risk-weighted assets is half percentage points. So we can, as a rule of thumb, halve those estimates to see how much more lending was provided during this period by those banks. And we come up with the 2.1, 2.2 percentage points of higher lending by treated banks with respect to the controls. In column three and four, we assess whether the supervisory dividend stimulus is directed to buy micro, small, and medium enterprises. From a policymaker's perspective, it is important to ensure that those firms are provided funding in a crisis, in particular, because those are the ones that have higher difficulties accessing credit and they cannot rely on financial markets to fund themselves, or usually do not rely on financial markets to fund themselves. We find that the impacts are strong for those small and medium enterprises, however, lending growth to micro enterprises is lower, and significantly so. This suggests that micro enterprises can be perceived as riskier or more vulnerable during periods of systemic shocks, in line with theories of packing order that have been recently published in the literature. In column five to six, we focus instead on vulnerable sectors, and we look at the firms and sectors that were most affected in terms of revenue by the COVID-19 lockdowns, and we see that the impacts are higher for actually for those firms, and significantly so with respect to the firms that were not. This suggests that dividend restrictions may have helped also some firms to survive the COVID shock, which will not arise. We don't have evidence on that, but these findings point to that direction. The next slide, I would like to show you some interactions with government guarantees. The results reported in column one and two are important for two reasons. First, in the first row, the coefficient of non-government guaranteed loans is positive, sizable and statistically significant, even though at only 10 percent level, indicating that credit supply grew independently of the government support. Second, we find strong complementarity with this fiscal policy measure as the interaction term flows, and most of our effects are driven by those guaranteed loans. Column three and four instead focus a bit on the distance to MDA, which was also explained earlier in the previous presentation, and it's the main measure of capital space the bank has a disposal to distribute more loans. Point estimates indicate that most of our results are explained by banks with higher capital space. We think that these finding points to the possibility that banks close to the MDA trigger are likely to have used the non-distributed dividends to build up much needed capital instead of lending. The last results that I would like to show looks at the risk-taking by banks. We define zombie firms as those firms above the 95th percentile of accumulated impairments within a bank-firm relationship, and as of 2019 Q4 to avoid endogeneity effects. Lending to such zombie firms will call for a type of gambling for resurrection. Excessive risk-taking by banks of this type could result in additional not needed losses. The results, however, indicate that the increase in lending supply is not driven by those firms with substantial impairments. If anything, lending to those firms is lower as Column six shows, and in particular the marginal effect of lending to more problematic zombie borrowers is not statistically different from zero as shown from columns three to four to six. In the last two columns, we turn to MPL ratios and banks with structurally high MPLs. We see that those banks do not take on additional risks. Actually, these banks take on less risks than most of the loans are provided by banks with low MPL ratios. Finally, let me turn to some conclusions and policy implications. Given the restrictions, we hope, after showing this evidence in the paper, can be an effective policy to sustain credit in a crisis in the downturn. A proven counter-cyclical supervisory policy that was the first time that was enacted. But possibly, this can be used also in financial crises, too. Of course, it depends on the type of crisis. Given the restrictions can enforce the effectiveness of counter-cyclical policy, and they can work together with other type of policies, fiscal policies, monetary policies, or other type of financial policies. The second point we'd like to make is that given restrictions can effectively more financial resources from inefficiently high shareholder consumptions to credit supply, our results show that non-distributed dividends are channeled to loans which are likely to have a higher growth multiplier than consumptions of shareholders, in particular in the downturn. And we note that at the same time, banks could benefit from this additional credit through higher net interest income. Few more aspects we think are worth highlighting. A caveat is due. The temporary nature of dividend restriction is however necessary to limit unintended policy effects, so strong components of supervisory forward guidance should accompany them. Clear communication on the duration, their rationale, and their implementation should help to limit inefficiencies owing to uncertain policy environments. Otherwise, financial stability can quickly be undermined. Additional welfare improvements resulting from dividend restrictions are worth pointing out. Dividend restrictions can increase solvency and loss of social capacity at the same time simultaneously. This is a feature that capital releases might not have. This means that in the event of a bail-in, debt holders and potentially also tax payers will bear a lower cost. Moreover, dividend restriction can address one of the problems related to the releases of macro potential or general capital requirements, which can be misused to distribute more dividends instead of to provide more loans or set aside capital. By combining the dividend recommendation or one type of some sort of dividend restrictions with releases, this unintended effect can be cancelled. We think that overall, based on our paper, we have a new kid on the block and there is a new policy tool at disposal of supervisors to be used in the future crisis. Thank you very much for your attention. Thanks Ernest and the discussion is Diana Bonfin from Banco de Portugal and Katholica Lisbon. Thank you and the ECB as well. I'm in the opposite direction of Florida and I get more affiliations and actually, yeah, the disclaimer is so long that I think it's not even here on the slide, but it for sure applies. Okay, so basically, I think what the paper tells us about is this restriction on dividends that was implemented at the beginning of COVID. So if we think about how things work in the crisis, so providers want to be sure that the banks have the ability to absorb losses, right? But if you if during the crisis, you're going to ask banks to increase capital requirements, this is going to have prosecutical effects. And so one solution that was adopted here two, three years ago was to tell banks not to distribute dividends to make sure they would be able to increase their loss absorbing capacity. So the recommendation issued at the beginning of the pandemic said that at least until October 2020, no significant institutions should pay out dividends. And so what Ernest and co-authors doing this paper is to try to understand how did this recommendation issued by the ECB affect banks' lending and risk taking. So they find that this dividend restriction was actually quite effective in avoiding a credit crunch. So what the banks did was to use these non-distributed dividends to lend more and to lend more especially to smaller and medium firms, as well as to firms in the sectors that were being more heavily affected by the pandemic. And they also cannot find any evidence of additional risk taking or zombie lending. So my comments will be mainly on three topics on bank profitability and dividend bonds, on why do banks, understanding why do banks follow the recommendation and then I will also talk a little bit about the magnitudes and finally also a little bit about the interaction with other policies. So the identification strategy here in the paper is to explore heterogeneity across banks in the area on the dividends that the banks had planned to distribute but did not do so. And this is reported as a percentage of risk weighted assets according to a survey that the ECB conducted in March 2020. And so when we think about this treatment variable, higher values of planned but not distributed dividends can mean different things. Well first they can mean compliance with the recommendation and this is the interpretation of the authors. So if I see that the bank was planning to distribute dividends but it did not well the bank was for sure compliant. But it can mean other things. It can also be related to risk preferences of the bank managers. So this is a soft recommendation so the banks could choose whether or not to comply and we cannot be totally sure that the bankers wouldn't decide to do this even if the ECB had not recommended them to do so. And actually I mean if you look at how banks were behaving at that time they also increased their impairments. So this would be consistent with this evidence of prudent behavior from the banks early in the pandemic. So the banks were claiming they wanted to be part of the solution not part of the problem this time so maybe they would have restricted the distribution of dividends anyway. And another thing that this variable can be related to is bank profitability. So the banks that had higher amounts of dividends to be distributed were for sure those that were more profitable before COVID started. So another possibility looking into these results could be that well maybe the banks that were more profitable before the pandemic were in better conditions to then lend more once the pandemic starts. So I mean here just to conclude this part I think it would be important to discuss these alternative explanations for what we see and how we look into the data. But I'll come back to this. My second set of comments is about why do banks follow the recommendation? So first I mean by when the bank managers decide to follow the recommendation there's two different things at least that they can do. So in the slides over three but here I aggregated them in two. So one thing the banks can do is well let's act counter cyclically and increase lending. And this is the goal of macro potential authorities right so so macro potential policy would want to kind of have this counter cyclical dimension and make sure that at the peak of the crisis there's not going to be a credit crunch. But banks can also decide to follow the recommendation and not distribute dividends to increase their loss of sovereign capacity and this would be more the goal of the micro potential authorities of the bank supervisors. And what we see in this paper is that the decision that the ECB adopted from a macro potential perspective actually had very positive macro potential effects. So I think this is great news for macro potential policy and I think it also delivers food for thought in terms of the interactions and potential conflicts of interest between macro and micro proof. But where I think the paper falls short a little bit is actually showing us evidence about the primary goal of the supervisors when announcing this. So there's this technical report that I participated in that where there's some descriptive evidence about what happened to banks capital and what did they do how did they adjust the balance sheets to as a reaction to this recommendation. But here in this paper the focus is really on the lending activity. So I think it would be important to complement the evidence in this paper also to this broader adjustment in balance sheets and to understand how these different dimensions interact. Still on this point I think the empirical strategy in the paper is not straightforward. So the authors start with these 110 banks and there were 35 banks that in the survey in March 2020 they said immediately they were not planning to distribute dividends. These go into the control group and then there were 75 banks that said they were planning to do so. And among these there were 53 that even though they were planning to do they didn't do it and so this is the treatment group. This is where the action is being explored. And then there are other groups that there are other banks that go into the control group. There's 11 banks that have already distributed or approved it. There's one bank that actually distributed more than planned and there's 10 of the banks that went ahead and distributed what they planned. And so in the paper there's some discussion about how to think about this control group. I think much more of it is needed because this is clearly not an easy discussion. Actually something where this is also important is to have more convincing evidence about parallel trends because these banks are not the same. As I said already these banks had different profitability levels. So banks that were planning to distribute more dividends for sure they were more profitable. And given also that compliance is a choice of the banks I think it would be really important to be clear first on the discussion on how the control group is formed and second on showing us more evidence about parallel trends. For instance, Jose Luis showed us these charts with the dynamic differences and differences that I think is a much clearer way to understand how similar these banks were before the recommendation. Also all the results are anchored on this intensity of treatment by exploring the differences in the amount of dividends that the banks plan to distribute. I think also just looking into treated versus non-treated banks which is less linked to profitability I think this could be something worth exploring. Then I have one question about the magnitudes that are reported in the paper. So the main result the number that you want to take away is that in the absence of this ECB recommendation, lending growth would have been 2.1 percentage points lower. But then a little bit later in the paper when the authors go and look into the role of government guarantees on bank loans they show that this effect in the absence of government guarantees would have been between 1.5 to 1.9 percentage points which is almost the same as very close to the entire effect. So I wonder if this meant that actually the dividend recommendation had much stronger effects on bank lending than the government guarantees. Of course it's not easy to disentangle this but I think it's worthwhile trying to address the question. Also the results are much larger for firms that borrow from several banks at the same time. So here looking into the magnitudes of the effect I find this puzzling because another conclusion in another part of the paper is that the effects are actually larger for small and medium firms which are less likely to borrow from multiple banks. So again this is something I would explore more. Then my last point is about other policies okay and of course this is a tricky point an easy point to make rather than and not so easy to address. I think the authors do a great job in trying to control for as much confounding policies that were implemented at the time. So on fiscal policy they control for the information that exists in an accredited which is government guarantees and moratorium loans but here on the right hand side this is a picture from the ESRB report on fiscal support during COVID and for instance that first set of bars is about other fiscal policy measures excluding the government guarantees and so that is also a big element of support and that cannot be captured here. Also monetary policy is captured by the uptake of TLTRO3 and the deposits at the central bank I wonder if this is enough and also we don't know enough about the buffer releases. Then just one minor thing I mean so the paper claims to be the first to this to be the first time that dividends restrictions were implemented well actually in Portugal they were implemented I don't remember if it was under government constancy or right after that sorry for that I should have but this was this was when we were trying to avoid the bailout. So before the strike it came in one of the decisions that was implemented was first let's ask the banks to stop paying their dividends and so well maybe another paper needs to be written on this to get more external validity and but so just to conclude I think that sorry just to conclude it seems that I mean the results in this paper are very clear in showing that recommending banks to restrict dividend distribution seems to be quite effective and does not lead to distortions so these are great news but it's actually kind of surprising there aren't any drawbacks so I wonder if this is the the silver bullet that now we have to solve any kind of problems okay so thank you so much. Thanks a lot Diana and now we have time for our questions first from within the room. Thank you I'm Jean-Doir Collier from HEC Paris. I just wanted to follow up on Diana's last slide actually so what seems a bit special with this with this policy is that the dividends were already planned and then you cancel them right so if you take the signalling theory of dividends seriously what this means is that you already benefited from the signal and then you don't have to distribute the money so of course this has a positive impact on lending in a sense right you get it for free even. I think that the real cost of such a policy would be that if you do it you know repeatedly then you lose the signalling function and presumably you have issues with the allocation of capital among banks and so I was wondering whether there was a possibility to look at that you know measures of how capital was allocated in the banking sector because that's where I would look for potential costs thank you. Thank you for the question any other questions from the floor so that's the case Andrea something in the chat. Let's wait a few seconds but so far everyone is satisfied. Okay then I will take another question and then if you have less questions that's also fine to bring us back to the schedule. You looked very well at the positive impact the intended impacts of the dividend recommendation and I wonder to get the full picture wouldn't you also need to look at that is the funding cost of banks also on a more persistent basis if there was also maybe a price to pay thank you. So first of all thank you Diana for very constructive comments and a lot of them actually so we will try to go through your slides and improve the paper. Regarding the first one in terms of the risk preferences of managers yes of course I mean we don't have a counterfactual on that side of course because it's going to be difficult to to see what will have happened with those dividends I mean my sense is that the banks will have distributed them anyway perhaps maybe a couple of outliers not I don't think that it could have been systemic systematic behavior by banks to not distribute dividends given the COVID crisis but still it's a valid point and maybe we have to touch upon that in the paper to make sure that this at least has been suggested by a by a discussion. Profitability we have a table in the paper that first of all we control for a bunch of bank-level variables profitability is among them some indicators of profitability are among them and then we have a table in the in the annex that looks only at banks that had positive plans to distribute dividends and not and exclude the banks that from the control group the banks that did not that are generally less profitable so they don't have anything to distribute to the shareholders and actually out the point estimates are the same weirdly enough the same in size and direction to the baseline but we can of course reinforce that argument in the paper. Interaction between micro and macro of course it's it's all capital requirements you know macro macro potential capital requirements are the same type of they are just called differently but in the end it's it's they have different reasoning of course and different rational why they are applied but it's still you know capital over its created assets so there is an interaction over there in terms of micro and macro it's it's nice it's nice that you pointed out to that and we will we will flag it as well maybe the technical report on capital provisions and at the bank level this was at the bank level and at the bank level we could of course observe you know the capital behavior how much of these funds were allocated to capital how much of two loans and how much to two provisions we done a credit we go a bit deeper to to reinforce our our identification of the effects and we cannot really look into the into one of the aspects in terms of capital there is this technical report over there we didn't we don't think about expanding into paper but we mention it in the we we indulge in self citation and we mentioned in the paper as as as evidence of some of the alternative alternative distribution mechanisms or allocation mechanisms of this of this policy then regarding your sample ish of 110 versus 99 or 100 so 110 is the is the total banks of of that we have in our sample but then in our estimations we have 99 because of missing data and other things that that affect this we take on board the the suggestion of the dynamic difference in difference we will implement that and try to see how that that what what does that tell us us and discreet discreet treatment variable as well so thank you very much for for those points we need to rephrase a couple of sentences i i i realize in the in the absence of government guarantees because there is a confusion there and what we say that we find a an impact of 2.1 percentage points if we scale back you know the the classical interpretation of increase of 100 percentage points the impact on estimates we have in our sample banks that have this ratio that we use as the main variable being around half so if we have the effects we get to 2.1 without government guarantees it's still a 1 percent to interpretation so it's not it will be helped also the other one so that's that's that's the thing and thank you for pointing out so this wall street journal article we we we missed that one and that's actually very useful and we will look if there is anything that has been written about that and actually what banks did at that time if they followed it or not so what what was the behavior um general thank you for your comment um of course here it's kind of as you say it's it's an easy choice we look at the landing and of course that you're going to find some positive effects the question is how big and you know you want to do it properly and everything you to see um in terms of costs there are costs and this goes back also to the question by by klaus there are costs that we don't address directly in this paper that are difficult to address also in terms of cost of funding because at that time in 2020 no banks basically issued any capital I mean it will have been a strange choice to issue some capital at the time of course because the stocks were plunging and you know the cost of funding of course was higher but in the medium term and actually coming back from from a recent conference in Brussels we were thinking about the medium-term cost of these policies so you can look at for example at the issuance is before covid and issuance is now in the last couple of years and how you know the pricing or the the the demand versus the offer the supply and demand effects have changed in respect to the how much banks were defund demanding in terms of capital how much was the supply there what was the different cost it's it's going to be challenged to collect the data but I think that that avenue can can can answer some of those questions in particular comparing those banks that decided to strictly follow the the ECB or comparing also actually the US with Europe the US they have also different type of recommendation but not as strict as as in Europe so it was more kind of rule-based instead of to court so maybe that could be that could be an avenue for future research of course to to to be looking at the medium-term cost of these of these policies and I agree with you it cannot be repeated it cannot be a repeated interaction game between the supervisor and the markets of the banks because of course financial stability and and other issues can be can be undermined this also goes back to to your question clouds thank you very much yeah thanks a lot so I think we have all earned now a short break so we reconvene at 1600 4 p.m. and let's give a hand to the great presentations the great presenters and also the good questions that we have as you have been asked


Okay, then let's get started. Okay, so welcome everyone. We now are as you know we're recording as well so for everyone who's not going to be joining today live, you can all watch it. I'll watch the recording later. So quick reminder this is a CNCS CNCF meeting so please attend to the CNCF code of conduct which basically means be respectful and kind to each other. Not too difficult I think. Okay, quick update on the glossary. So I think I mentioned that before we are working on a glossary marketing plan with the CNCF. And the goal is to have more members media analysts to use it in their own material right kind of like seeing like okay we have these vendor neutral definitions there and whenever we're referring to that they should at least kind of look at glossary and see if that's a good point. We're also kind of talking about a cloud native learning journey page, which will be something where all the different cloud native resources will be like right now you have all these things in different places when you want to so it's like really difficult if you want to learn about cloud native. You have to find them there's no one place so we want to put it all together. Start with the easiest right like the thing. Like, first of all will come like a very easy. What is cloud native. The second one will probably be the glossary. Then, I don't know we have several things that we have to build like have to add there like the cloud native landscape guide and so on and it will get increasingly advanced. So there is something for every, and it will be clear what is one on one to two and so on so I think that will be really helpful, and it will also help visit the game visibility for all assets. Again, so last time we were talking about how we would love for the different teams to talk about the glossary, the own project in their own regions and I've seen that the Korean team and the Italian team have at least like created their localized, or their own deck in the localized folder. And I was wondering if, yeah, do you have any concrete ideas already or was it something that was like just just to get started. As for the Italian team, we just started. We haven't spent much time yet. We will focus on it over the next two weeks probably. So maybe on the next meeting we'll be able to tell you something more. Yeah, do you have any, did you, did you find any, because one of the things like finding opportunities to submit this, because I think that's probably the more. Yeah, yeah. I think we are thinking about case the Italy, it will be in November. Oh, that would be awesome. So, so that could be a first, a first opportunity. We have to think about presenting it within different companies, for example, we have, we are six contributors from different companies so begin from our own company could be a start. Yeah, yeah, awesome. Yeah, not more than that sorry. Not at all, I mean like that was just a month ago that we put it out there and it's like again like the first, you cannot present anywhere if there is no like opportunity you have, but I don't know so it's great that KCD Italy is still like available to open. It's like once it like what it's closed you have to wait for a whole full year right so I don't think there's a KCD Korea yet right. Maybe team though. One more thing. Yeah, and yeah so I assume the same for for you. So go and she won't write like still. Yeah, actually, we also created our Korean version. And we actually utilize this presentation to contribution academy in posted by Korean Korean government agency. We introduced this material to around 20 mantis. Actually, June and I are mentor of the program. So we already introduced it. Since the club native of glossary project to them, and also the Korean localization. So it is the first version of the introduction for Korean folks, regarding the our project. Awesome. Cool cool. And again as a reminder so there is a promo kit folder link here that should be accessible to anyone that has the deck. We also have are trying to keep the localized decks in there so other people can see them so you know like if other people have good ideas or whatever. So we want to share as much as possible. I also started a social media because I forgot that I was going to do this and I started this morning. And but feel free of anyone I know and at least as also in marketing so if you have any ideas, because I think like two things that we want to. And again this is for the teams to like you personally to promote on your social media account to you know, your network. And I think there are two goals one is like getting like, so there are two kind of posts that we can do like one is like hey there is a glossary inquiry and check it out right so for people to and then another one is like hey, there is a team, we need some help right like two different things because we need both we need people to know about it to use it but also to contribute. And so again like whoever wants to contribute potential posts or ideas that they have or once you've posted them and you've seen like some got a lot of engagements is like oh maybe that's something that resonated like put it in there the more we have the better we can all share. Okay, I think that was from me so now is. Thanks so cool. Yeah, I hope to introduce new PR template. Previously, we didn't have PR template. Recently, in maintainers meeting, we have decided we decided to make new PR template so you can check the first link it is. And could you click the first three. Sorry. So it is PR template so you can open up here. Now you need to describe your changes in this PR and if they are there is related issue then you can put a related issue. And then the contributors need to check the checklist for opening up here. So we are regarding the. The originality of your work and the sign up procedure. As you recall, we, we applied this seal in our repository. So you needed to do signing off sign off for your commit. So it is about the checklist for this seal. So, yeah, that's all for the. This PR. PR template and maybe you can check the. It was an pleasure people are using this PR template. Yeah, I am. If you have any. If you find any investment point about regarding the PR template and you can open up here for the PR template as well. So, thank you. I think so. Yeah, we can move towards. Okay, cool. I'm sorry for the weird witness in a moment. Okay, so, next is overview that's also so far right you wanted to announce we have a new Spanish approval. Maybe a station team, since there is layer here, I think. No, that only that we have a new member on the team of the proper team. We are about seven writers and reviewers. And now we have a new approver that is Nicholas. In fact, there were two members that I wanted to, to gain as approvers. But we choose it Nicholas, because the other member was already an approver in order to complete this project so. But it's nice to have several people trying to get involved with trying to join in as a progress reviewer. So the team is working really really great. And regarding to status, we have 11 terms that are published, two terms that are having added in the last month, and we have three more in progress. Another good thing is that the blog post about our team was published in the 19th of August. So we got some some publicity for our team. So far, I think we don't have new members joining us writers but we are stable, we are using also the project board and so far is working really good for us. And we are applying the same thing to this Kubernetes documentation. Now we will be able to create also a project board for the team. Yeah, we are joining efforts between the Kubernetes documentation team and the glossary because at the end we are working on this smaller class the same things the same time the same concept so it's, it's nice to join forces across teams in Kubernetes community. And that's all regarding publicity probably we will do a talk about the glossary and another localization efforts in the cafe Spain that is also taking place in November. This is just after the Italy, because it is so I think it's the next week. So, yeah, trying to get the, the people to know that this is a project going on, how they can do how they can participate on contribute to this to the glossary to the this organization also to other CNCF projects like the security way paper that we are also localizing or the covenants and dashboard the interface that she's made a full with covenants. So here we have other people is back as finish spanish speakers trying to, to get these projects and a lot of projects on the CNCF in in their native language so I think it's working so far so good. Yeah, and I forgot to add about the blog post so that I will add in the yeah so a link to it so that people can see it as well. And I just thought like because we were talking about social media posts that is something else that we should use in social media over and over again right it's like hey join our team here is why whatever so instead of linking to the glossary so the blog post something that each team can use over and over again as a resource to learn what like why the. And especially because in the blog post there are some context of why it's important in your language so in those we had some history about why Spanish is is why they use it so it's a better entry point that just a random repository with a lot of features open so it's a more human way to start getting into a project. It's a lot more personal right so it's a very. So yeah and I love those blog posts because they always learn a ton. Okay, so French please stop. Yes. So first of all nice to meet you all. This is the first time I'm joining this meeting. Flavia was not able to attend today. So this is really the beginning of our journey. So we started to do a couple of. But only a couple because we really really want to review them all together so that we can be aligned on some terms and do we need to translate this one on and this kind of stuff. So that's what we did. We hope that we'll be able to integrate them and to merge them by the end of the week. And after that, we will continue so we really hope to be able to have the first batch of 10 words that needs to be translated for the forgoing live by the end of the month. So, yeah, we will try to do that. Let's hope we'll be able to. That's exciting. I saw the case of the France for next year would they bake. Yeah, yeah, it will. But yeah, yeah, I know them but actually I'm not living in France anymore. I'm living in Montreal in Canada. So, yeah, I know them. But I don't think I will be able to attend this one, but just before COVID we were planning to have a KCD here in Montreal. So, I think we will resume that quite soon. But right now I think most of the things are a bit under the ice on the ice because on the ice because of the cloud Cuban coupon, which is arriving quite fast here in Detroit. So, most of the effort will be going towards that. And I think we will resume that right after. Yeah, and so you said we are different. Oops, sorry, good. No, no, it's okay. But we are really close to the, let's say the Cuban it is a local community. I'm quite a lot. I was involved in the KCD that we are selling to do in before the COVID. So, we definitely plan to have something related to the glossary as soon as we have published something. Awesome. And I know that something that you discussed because Flavien told me that this is something that you have discussed in the past that it would be great to be present on meetup and stuff like that. So, definitely this is something that we will do. Yeah, but yeah, again, like, still don't don't stress too much about the, it's a lot of work so don't worry. We want to know. Yeah, yeah, yeah, yeah, I know. You know, but excited to have you on board. And one question maybe how, how did you end up joining the glossary meeting, the glossary, not the meeting glossary. The glossary. So, basically, I'm, I've been really involved in the open source community for a very long time. I've been the leader of the French open to community for six years, and stuff like that. And I've always had the translation in my mind. I did quite a lot of something that that's always I started to enter in the community. And I did that for the last 20 years. And I saw and I'm part of my job is doing some kind of technical curation for my team, team workers. And I'm, I saw, I don't remember which one, maybe it was the Korean glossary that went live. And I talked to Flavien and Ludovic and told them, okay, I saw that there's a team that we need to start a team to do that. There is no, nothing going on for the French one. So, let's do that. Awesome. Yeah, Ludovic and Flavien and myself, we were, we used to work in the same company in France. So, yeah, and with Flavien, we still work in the same company here in Canada. Okay. Oh, yeah. Well, yeah, excited to see the French glossary coming to life. Yeah. Yes, yes, yes. I think I really think it would be great. Yeah. I don't think we have anyone from Team Hindi here, do we? No. No. You can see it there, 15 live, five new terms and 12 work in progress. Okay, let's move to Italian and Lisa. Hello. Wow. We managed to translate localized 10 new terms that currently on review and some of them are accepted, but waiting for merging. The new terms are actually in progress and we counted 35 terms out of the total 73, 73 terms of the English repo of the English as per now. At the beginning of August, they were 33, 73. We are a bit struggling because the team was made up of six contributors. One person is still in sick leave, unfortunately, one is paternity leave, one is on holiday for one month, so we will see how to catch up and speed up because our goal is to complete the glossary by Detroit, by the KubeCon, Yeah, we decided to have that goal so that we will do our best effort, we will do our best, but at least we have an ambitious goal.  I'm not stressing the point is that in these days, only three of us are working on it, and I'm struggling with the technical workflows and everything so I'm slowing down the team. Otherwise, the other two are translating to three terms per week, so they are Yeah, yeah, yes. I think we need to understand as a team how to keep up with updated translations. I mean, I'm talking about the source language, because if English gets updated, we need to try to understand how to trace it, how to monitor it, and how to define your recovery terms. Yeah, I know I saw it. I saw it, but I'm not sure I can understand that so I need someone, not the team that takes on charge. That kind of issue. But again, we'll see. And that's okay. Yeah, that's a lot. That's awesome. Yeah. Great plans. Yeah. Nice to go. Yeah, yeah. Korean team should follow. And Korean does follow. Who wants to do the Korean part. Yeah, maybe you can introduce. Can you go. Okay, I will start. So I'm very glad to join this meeting. And actually, this is my second time to this meeting, but I'm still a little nervous. Anyway, let me start. Since the last meeting, we have localized five more terms and we have, like, nine terms are working in progress. And as you know, we share and check our localization progress in the discussion. You can see our progress in the discussion. And eight new contributors have participated since the last meeting. And also the. We have planned. We have a plan to merge the Dabco branch into main branch. Maybe this Sunday. Maybe that's all. Thank you. Awesome. Okay, and Spanish we've done already so. Any. Sorry. Don't be nervous. I was talking to Duncan. Oh, yeah, not at all. Oh, thank you. Thank you so much. Yeah, any discussion points or anything that you have that you didn't put on the agenda or. Okay, cool. Then we don't have to make this longer than it is. I know the people in Korea want to go to bed. So thanks again to you for the most present team and the latest. Okay, well thanks everyone. And we'll talk to you in a month, I guess. Sure. Thank you. Bye bye.


The next step in our introduction is to talk about accessing data and to get that started we need to say a little bit about data formats. And the reason for that is sometimes your data is like talking about apples and oranges. You have fundamentally different kinds of things. Now there are two ways in particular that this can happen. The first one is you can have data of different types, different data types. And then regardless of the type you can have your data in different structures and it's important to understand each of these. We'll start by talking about data types. This is like the level of measurement of a variable. You can have numeric variables which usually come in integer, whole number or single precision or double precision. You can have character variables with text in them. We don't have string variables in our they're all character. You can have logical which are true false or otherwise called Boolean. You can have complex numbers and you can have a data type raw. But regardless of which kind that you have you can arrange them into different data structures. The most common structures are vector, matrix or array, data frame and list. We'll take a look at each of these. A vector is one or more numbers in a one dimensional array. I mentioned them all in a straight line. Now what's interesting here is that in other situations, if it's a single number, it would be called a scalar. But in our it's still a vector is just a vector of length one. The important thing about vectors is that the data are all of the same data type. So for instance, all character or all integer. And you can think of this as ours basic data object and that most of the things are a variation of the vector. Going one step up from this is a matrix matrix has rows and columns. It's two dimensional data. On the other hand, they all need to be of the same length. The columns all need to be the same length and all the data needs to be of the same class. Interestingly, the columns are not named. They're referred to by index numbers, which can make them a little weird to work with. And then you can step up from that into an array. This is identical to a matrix, but it's for three or more dimensions. On the other hand, probably the most common form is a data frame. This is a two dimensional collection that can have vectors of multiple types. You can have character variables in one, you can have integer variables in another, you can have logical and a third. The trick is they all need to be the same length. And you can think of this as the closest thing that are has that's analogous to a spreadsheet. And in fact, if you import a spreadsheet, it's going to go into a data frame typically. Now the neat thing is that are has special functions for working with data frames, things that you can do with those you can't do with others. And we'll see how those work as we go through this course and through others. And then finally, there's the list. This is our most flexible data format. You can put basically anything in the list. It's an ordered collection of elements. And you can have any class, any length, any structure. And interestingly, lists can include lists, include lists, and so on and so forth. So it gets like the Russian nesting dolls, you have one inside the other one inside the other. Now the trick is that may sound very flexible, may very good. It's actually kind of hard to work with lists. And so a data frame, really sort of the optimal level of complexity for a data structure. And then let me talk about something else here, the idea of coercion. Now, in the world of ethics coercion is a bad thing in the world of data science coercion is good. What it means here is coercion is changing a data object from one type to another. It's changing the level of measurement or the nature of the variable that you're dealing with. So for example, you can change a character to a logical you can change a matrix to a data frame, you can change double precision to integer, you can do any of these. It's going to be easiest to see how it works if we go to our and give it a whirl. So open up the script and let's see how it works in our studio. Now for this demonstration of data types, we don't need to load any packages, we're just going to run through things all on their own. We'll start with numeric data. And what I'm going to do is I'm going to create a data object, a variable called n1, my first numeric variable. And then I use the assignment operator. That's this the little left arrow. And it's read as n1 gets 15. Now, R does double precision by default. Let me do this n1. Then you can see that it showed up here on the top right. If I call the name of that object, it'll show its contents in the console. So I just type n1 and run that. And there you can see in the console at the bottom left, it brought up a one in square brackets. That's an index number for the first object in an array. And this is an array of one number. But there it is. And we get the value of 15. Also, we can use the r command type of to get a confirmation of what type of variable this is. And it's double precision by default. We can also do another one where we do 1.5. We can get its contents 1.5. And then we see that it also is double precision. We want to come down and do a character. I'm calling that c1 for my first character variable. You see that I do c1, the name of the object I want to create. I put the assignment operator, the less than and dash, which is right as gets. And then I have in double quotes. In other languages, you would do single quotes for a single character. And you would use double quotes for strings. They're the same thing in R. And I put in double quotes, the lowercase C. That's just something I chose. So I feed that in, you can see that it showed up in the global environment there on the right. We can call it forward and you see it shows up with the double quotes on it. We get the type of and it's a character. That's good. If we want to do an entire string of text, I can feed that into c2, just by having it all in the double quotes. And we pull it out and we see that it also is listed as a character, even though in other languages it would be called a string. We can do logical. This is L one for logical first. And I'm feeding in true. When you write true or false, they have to be all caps or you can do just the capital T or the capital F. And then I call that one out and it says true. Notice, by the way, there's no quotes around it. That's one way you can tell that it's a logical and not a character. If we put quotes into it, it would be a character variable. We get the type of and there we go. It's logical. I said you can also use abbreviation. So for my second logical variable, L2, I'll just use F.  And then we get the type of again, also logical. Then we can come down to data structures.  And I'm doing it by creating V one for vector one. And then I use the C here, which stands for concatenate. You can also think of it as like combine or collect. And I'm going to put five numbers in there. You need to use a comma between the values.  And there's my five numbers. Notice it shows them without the commas, but I had to have the commas going in. And then I ask our is it a vector is period vector. And then ask about it. And it's just gonna say true. Yes, it is. I can also make a vector of characters. I do that right here. I get the characters. And it's also a vector. And I can make a vector of logical values true and false. Call that. And it's a vector also. Now a matrix you may remember is in going in more than one dimension. In this case, I'm going to call it M one for matrix one. And I'm using the matrix function. So I'm saying matrix and then combine these values t t f f t f. And then I'm saying how many rows I want in it. And it can figure out the number of columns by doing some math. So I'm going to put that into M one. And then I'll ask for it and see now it displays it in the rows and columns. And it writes out the full true or false. Now I can do another one where I'm going to do a second matrix. And this is where I explicitly shape it in the rows and columns. Now that's for my convenience. R doesn't care that I broke it up to make the rows and columns, but it's a way of working with it. And if I want to tell it to organize it to go by rows, I can specify that with the by row equals t or true command. I do that. And now I have the ABCD. And you see by the way that I have the index numbers on the left are the row index numbers. That's row one and row two. And on the top are the column index numbers and they come second, which is why it's blank and then one for the first column and then blank and then two for the second column. Then we can make an array. What I'm going to do here is I'm going to create data and I'm going to use the colon operator which says give me the numbers one through 24. I still have to use the concatenate to combine them. And then I give the dimensions of my array and it goes rows, columns, and then tables because I'm using three dimensions here. I'm going to feed that into an object called array one. And there's my array right there. You can see that I have two tables. In fact, let me zoom in on that one. And so it starts at the last level, which is the table. And then we have the rows and the columns listed separately for each of them. A data frame allows me to combine vectors of the same length but of different types. Now what I'm doing here is I'm creating a vector of numeric values, of character values and logical values. So these are three different vectors. But then what I'm going to do is I'm going to use this function C bind for a column bind to combine them into a single data frame. I'm calling it DFA for data frame a or all. Now the trick here is that we had some unintentional coercion. By just using C bind, what it did is it coerced it all to the most general format. I had numeric variables, I had character variables and logical. And the most general is character. And so it turned everything into a character variable. That's a problem. It's not what I wanted. I have to add another function to this. I have to tell it specifically make it a data frame by using as dot data dot frame. When I do that, I can combine it. And now you see it's maintained the data types of each of the variables. That's the way I want it. And then finally, I can do a list. I'm going to create three objects here. Object one, which is numeric with three values, object two, which is character with four and object three, which is logical with five. And then I'm going to combine them into a list using the list function. Put them into list one. And now we can see the contents of list one. And you can see it's kind of a funky structure. And it can be hard to read, but there's all the information there. And then we're going to do something that's kind of, you know, hard to get around logically. I'm going to create a new list that has list one in it. So I have the same three objects, plus I'm adding on to it list one. So list two, I'm going to zoom in on that one. And you can see it's a lot longer. And we've got a lot of index numbers there in the brackets. There are the three integers, the four character values and the five logical values. And then here they are repeated, but that's because they're all parts of list one, which I included in this list. And so those are some of the different ways that you can structure data of different types. But you want to know also that we can coerce them into different types to serve our different purposes. The next thing we need to talk about is coercing types. Now there's automatic coercion, we've seen a little bit of that, where the data automatically goes to the least restrictive data type. So for instance, if we do this where we have a one, which is numeric, a B in quotes, which is character, analogical value, and we feed them all into this idea coerced one. And by the way, by putting parentheses around it, it automatically saves it and shows us the response. Now you can see that what it's done is it's taken all of them and made all of them character because that's the least specific, most general format.  On the other hand, you can coerce things specifically if you want to have them go in a particular way. So I can take this variable right here, coerced to, and we'll put a five into that. And we can get its type and we see that it's double. Okay, that's fine. What if I want to make it integer? Then what I do is I use this command as dot integer. I run that feed into coerce three, and it looks the same when we see the output. But now it is an integer. That's how it's represented in the memory. I can also take a character variable. And here I have one, two and three end quotes, which make them characters. I can get those and you can see that they're all character. But now I can feed them in with this as dot numeric. And it's able to see that they are numerical numbers in there and coerce them to numeric. Now you see that it's lost the quotes. And it goes to the default double precision. Probably the one you'll do the most often is taking a matrix. And that's just let's take a look, I'll make a matrix of nine numbers in three rows and three columns, there they are. And what we're going to do is we're going to coerce it to a data frame. Now that doesn't change the way it looks, it's going to look the same. But there's a lot of functions you can only do with data frames that you can't do with matrices. This one, by the way, we'll ask, is it a matrix? And the answer is true. But now let's do this, we'll do the same thing and just add on as dot data dot frame. And now we tell it to make it a data frame. And you see, it basically looks the same. It's listed a little differently. This one had its index numbers here for the rows and the columns. This one is a row index. And then we have variable names across the top and it's just automatically giving them variables one, two and three. But the numbers in it look exactly the same. On the other hand, if we come back here and ask, is it a data frame? We get true. And so it's a very long discussion here. But the point here is data comes in different types and in different structures, and you're able to manipulate those so you can get them in the format and the type and the arrangement that you need for doing your analyses in R.


All right, so with what we know about free energies at this point and spontaneity and thermodynamic relationships, we're at a point where we can put all those pieces of information together and start to learn something about phase transitions. So changes of phase between two different phases of matter. For example, let's say ice and water, the solid and the liquid forms of water. We all have plenty of experience with both liquid and solid water, of course. And we know that at least at room temperature and room pressure, we're at 298 Kelvin in one atmosphere. We know it's a spontaneous process that solid ice will melt at room temperature, right? So that process is spontaneous. We know that a spontaneous process at constant temperature and room pressure will have a Gibbs free energy change that's less than zero. So when this process takes place, solid water turns into liquid water. Solid water turns into liquid water at these conditions. That free energy change must be negative for a spontaneous process, actually not less than or equal to because it's spontaneous and not equilibrium. It will be strictly negative, it will be a negative free energy change. So that tells us for sure that the Gibbs free energy of the solid is bigger than the Gibbs free energy of the liquid. When the solid turns into a liquid, the Gibbs free energy is becoming smaller. So the Gibbs free energy change is negative. So we know this fact about the relative free energies of ice and water at room temperature and room pressure. What about substances that we have less experience with? If I were to hand you a substance that you don't know, the melting point, for example, could you predict whether it would melt or whether it would spontaneously freeze at a particular temperature? We want to be able to predict what phase transitions are going to happen spontaneously. So to answer questions like that, we need to start thinking about what we know about free energies and how free energies change as we change the temperature. So that's the thermodynamic relationship. We'd like to know about. So remember the fundamental equation for the Gibbs free energy. So that's a plus sign, that's a minus sign. So the fundamental equation for Dg is minus Tds plus Vdp. So that tells us immediately, actually that's not correct. That would be a different fundamental relationship. Dg is equal to minus SdT plus Vdp, the fundamental variables, natural variables for Gibbs free energy, your temperature and pressure. So there's the correct fundamental equation for Dg. That reminds us that Dg, Dt at constant P, derivative of G with respect to T, holding this term constant is negative S. So there's a thermodynamic relationship that we know. When I change the temperature, suppose I raise the temperature of an object at constant pressure, its Gibbs free energy is going to change as negative S. We know something about entropy. We know entropy is always positive. Third law tells us the entropy is zero if we're at zero Kelvin. But at any temperature above zero Kelvin, the entropy will have increased above the value of zero. So entropy is always positive. So that tells us that Dg, Dt at constant P, that's always going to be a negative number. Free energy is always going to decrease as I raise the temperature. When the temperature goes up, Gibbs free energy is going to go down if I do that at constant pressure. So let's see if we can understand what that means about the relative free energies of solids and liquids. I draw a graph now of how the free energy is changing. As I change the temperature, we've just discovered the slope of that graph is negative S. The slope of that graph is a negative number. If I draw a graph for how the free energy of, let's say this is the solid, it's decreasing. As the temperature increases, the free energy is decreasing. I'll now put another line on that graph for the liquid. And to know how to draw that line for the liquid relative to this line for the solid, we need to know that the entropy of a liquid compared to the entropy of the solid, the liquid is more disordered. The solid is an orderly crystalline arrangement of the molecules. The liquid is a condensed but still disordered arrangement of the molecules. So the entropy of the liquid is bigger than the entropy of the solid. That means when I draw this line for the liquid, it's going to decrease at a faster rate. So there's a line for the free energy of the liquid dropping faster as a function of temperature than the solid does. So all that we've determined, so shallow slope for the solid, steeper slope for the liquid. We've determined that just by knowing this thermodynamic relationship and the fact that the entropy has to be positive. This tells us a couple of things immediately. The slopes of these two lines are different ones bigger than the other. Those two lines always have to cross each other at some point. Doesn't matter that at some conditions the free energy of the liquid is bigger than the free energy of the solid. If I go to high enough temperatures, these lines will eventually cross. And beyond that point, the free energy of the solid will be bigger than the free energy of the liquid, just like was true for water at room temperature. So water is above the point where the lines cross. Free energy of the solid is bigger than the free energy of the liquid. For every substance, the lines will eventually cross at high enough temperatures, the liquid will always have a lower free energy than the solid. The liquid will be more stable than the solid, and the solid will spontaneously convert to the liquid at high enough temperatures. There's also guaranteed to be a point where those two curves cross. That point, of course, is the melting point or the freezing point. More formally, we call that the temperature fusion, but that's the point where the solid and the liquid have the same free energy. If I had asked you to define the melting point, you'd say that's the temperature at which the solid converts into a liquid. As we raise the temperature, but in a thermodynamic, from a thermodynamic point of view, at the melting point, the difference in free energies between the solid and the liquid is zero. The free energy of the liquid is equal to the free energy of the solid. The difference in free energy between those two quantities is equal to zero. Those are all saying the same thing. Another equivalent statement is to say that the solid and the liquid are in equilibrium with one another. This is the only temperature at a particular pressure where the solid and the liquid can coexist, can be in equilibrium with each other. Because that is the single temperature at which the curves cross and at which their two free energies are equal to one another. So that's in a more thermodynamic sense, the definition of the melting point is the temperature at which the solid and the liquid have the same free energy as each other. So what can we do with that information? We've in fact learned something not just about solids and liquids, about melting, which is the example we've used right here. But so the delta G when solid converts to liquid, that delta G is equal to zero if we're talking about melting. But we could just as easily be talking about boiling. The delta G of vaporization would be equal to zero at the boiling point, at the temperature of vaporization. We could also be talking about the free energy of sublimation. So any one of these free energy changes for any particular phase change at the particular temperature where those two phases are in equilibrium, more generally I could say the free energy change is equal to zero for some arbitrary phase change. We'll use this Greek letter phi to indicate an arbitrary phase change, regardless of whether we're talking about melting or boiling or sublimation. The free energy change during that phase change is equal to zero when we're at the temperature where those two substances are in equilibrium with each other. So we've learned something useful about phase changes now. If we combine that with a little bit more thermodynamic knowledge, we can start to make some predictions about what temperatures substances will melt or boil or sublimate at, and that'll be next.


So, recently on the podcast, we talked about the new business roundtable pledge, which includes dozens of billionaire CEOs, and they say that they will start putting people over profits. Now, this is laughable. It's evident that all they're trying to do is communicate to a potential progressive president that, you know, they're going to try to behave so you don't have to impose any new taxes or regulations on them because they're going to self-regulate.  It's something that serious people don't take seriously and shouldn't take seriously because we know what they're trying to do. This is nothing more than virtue signaling. But since the people over at Fox Business are not serious people, they did take this very seriously. So Stuart Varney actually spoke out against this pledge that was just put out by the so-called titans of industry, and he's going to complain that this is a bad idea because you definitely should not put people over profits. You should put profits over people. Like I'm not joking. He's literally going to make the case for what is essentially late stage capitalism. Take a look. I don't know whether it was an image polishing effort or a genuine shift by business. But I'm not wild about the statement from the Business Roundtable. The very top echelons of American business issued a statement pledging awareness of social issues. They want companies to be first and foremost nice. They want business to be sensitive to customers, employees, suppliers, communities, and almost as an afterthought, shareholders. Maybe we should remind the titans of business that it is shareholders who own the company and it is their money that is at risk. There's a lot wrong with this. If shareholder capital is diverted outside the company, future performance suffers. And that means all stakeholders suffer. Innovation suffers. The competitive ethic suffers. I know about you, but I invest in companies that I think will make a lot of money and that's what I want them to do. So the company will make progress and I'll share in it. That's why I invest. Now we all have our own personal values. I wouldn't invest in a tobacco company for example, but that's not what these executives are talking about. They're engaged in a reversal of corporate priorities. It doesn't look like profit is job one these days. I can understand where this is coming from. It's a deliberate softening of capitalism's image and that's a response to the attacks from presidential candidates, especially Senators Warren and Sanders. Who knows who wins in 2020? Business appears to be hedging its bets. I have news for America's business royalty. The left has no time for you. No amount of softening and promising to be nice will do you any good at all. If the socialists win, you're toast. So get real and support vigorous capitalism which made America great and prosperous in the first place. Talk about a hot take. Stuart Varney is so smug.  Like you're literally advocating for what is tantamount to late stage capitalism. And it's just how do you think you're going to win people over? This is a big yikes, right? Because if capitalism is currently undergoing a PR crisis, do you honestly believe that making the case that we should put profits over people is going to help capitalism's cause? If you truly support capitalism, then really what you should be arguing is to actually impose more regulations and make it a little bit softer around the edges because that's what would get most people off of your backs. Look, I know and a lot of people know that if you impose new regulations on capitalism, capitalism is like a virus. It will attack those new rules that will attack and undo anything that stands in its way. But at least, you know, if you want to win people back, that's the argument that he should make. Sure, you know, I think capitalism maybe it's a little bit too unfettered. Maybe we should rain it in a little bit. But what he's saying here is, um, no, capitalism is just fine the way it is.  That's basically what he's saying here in a nutshell. He says, I don't know about you, but I invest in companies that I think will make a lot of money. And that's what I want them to do. Great. But you see the things that most people don't invest in companies. Most people don't have all of these investments.  Okay, I don't care where you're investing. If these large multinational corporations are going to pollute the planet, rig the economy, crash the economy, then I don't care if us imposing new regulations on them doesn't help you make more money, Stuart. I don't care. His salary at Fox News is about $600,000 a year, I believe. He has a net worth of $10 million. I think you're going to be okay, but I think you'll survive if we impose some more regulations on capitalism. He also says, now we all have our own personal values. I wouldn't invest in a tobacco company, for example, but that's not what these CEOs are talking about. They're engaged in a reversal of corporate priorities. It doesn't look like profit is job number one these days. First of all, I don't know what world you're living in, because of course that's what they care about. That is their number one priority, and you can see it in their actions.   When Apple has to put up suicide nets around sweatshops because conditions are so terrible that workers in China would rather kill themselves than continue working under those horrible conditions, what exactly do you think that they're valuing here, Stuart? People or profits? When Amazon warehouse workers have to piss in bottles to save time, do you think that they're valuing people over profits, when just 100 companies emit the lion's share of greenhouse gas emissions and ruin the planet just so they can increase shareholder value? I mean, do you not see that as them putting profit above everything else, including the planet that they live on? I mean, if you honestly believe that they're going to start not looking out for the bottom line, you're just delusional, you're absolutely delusional, and you don't even understand the way that capitalism works, which is the system that you shill for.  Because a lot of people can finally see that capitalism is not working out for them, hence why a large portion of millennials support socialism. Now in the event we hypothetically lived in a democratic socialist society, and for whatever reason it started to erode, institutions became corrupted, I would realize as a democratic socialist that we would have to reform that system because people are not liking it, they're growing dissatisfied with it, but Stuart Varney, what does he do? Well he just pretends like nothing is happening, this is that meme with a dog in the house that's on fire saying this is fine, personified here with Stuart Varney. So everything he said there is wrong, but there's one exception, he was absolutely right about one thing, quote, the left has no time for you, no amount of softening and promising to be nice will do you any good at all.  That's the first thing I've ever heard Stuart Varney say, that's correct.