Indeed, this became the norm across the income statement. Thus, ordinary profit rose by more than 30%8 year-on-year in the first quarter, with increases of 9% both in net interest income and fee and commission income. Meanwhile, impairment losses fell by 12.5% compared with March 2021. It must be noted, however, that the full economic and financial impact of the war in Ukraine did not materialise in the first quarter of the year. As regards the cost of bank funding, the average cost of liabilities9 has fallen since the onset of the pandemic, down to 0.5% at end-2021. The latest data available point to a change in trend, albeit with these costs holding below pre-pandemic levels (slightly above 1%) for now. In particular, wholesale market funding costs rose in the initial months of 2022. Indeed, expectations of interest rate rises have fed through to wholesale market interest rates on long-term bank debt (a measure of funding costs) more robustly than to the Overnight Index Swap (OIS) rate.10 Thus, banks’ credit risk spread has widened. Banks stepped up their debt issuance in 2021 to comply with prudential and resolution requirements, with issuances of Tier 2 instruments and contingent convertible bonds  8  By contrast, in 2022 Q1 net profit fell by 30% compared with the same period a year earlier, but this was due to the almost € billion recorded in extraordinary gains in March 2021 as a result of the merger at CaixaBank.
An important similarity with the other measure, however, is that the liquidity that was injected via Kaupthing into the system also comes back to the Riksbank in the form of deposits from the bank(s) that have excess liquidity. In this way this measure does not have any direct monetary policy effects either. The common denominator for everything the Riksbank has done to date is that all measures are aimed at strengthening liquidity conditions within the Swedish financial system. Unlike many other countries, thus far it has not been necessary for the Swedish authorities to provide the banks with any form of capital support from the government. This point is also important. However, it remains to be seen whether the Riksbank and other authorities have done enough. How the situation develops in the future is essentially a question of what happens outside of Sweden. Nevertheless, the Swedish authorities are prepared to take those measures that are necessary to ensure financial stability. For the Riksbank, this means that we will continue to provide the banks with the liquidity required for the financial system to function. Let me now proceed to discuss paths out of the crisis. Paths out of the crisis We are now in the middle of the most serious financial turmoil that the world has seen in a very long time. It is difficult to anticipate how the situation will develop in the future, which means that it is also difficult to talk about paths out of the crisis.