The uncertainty interval does not take into account the zero bound. BIS Review 56/2009  11  12  Source: The Riksbank  9
BIS central bankers’ speeches  5  Spanish banks’ attributed profits in 2014 increased by close to 34%, continuing the recovery initiated in 2013. Despite the backdrop of declining credit and low interest rates, net interest income rose by almost 5% owing to financing costs falling at a swifter pace than the return on financial products. Also, the containment of operating expenses and the decline in asset impairment losses have contributed to the improvement in results. However, the persistence of the environment of very low interest rates and the presence of a significant volume of non-productive assets will continue to bear down on the income statement. That will lead banks to reflect on a sustainable business model, involving the application of new technologies, new activities and an office and staffing structure better tailored to attaining this model. In December 2014, the top-quality common equity tier 1 (CET1) capital ratio of our banks stood at 11.8%. This ratio rises to 13.6% for total capital. Both figures amply exceed the regulatory minimum levels. Even if the standards scheduled to be in force from 2018 – when Basel III becomes fully applicable – were to be applied, these percentages would remain above the minimum levels (9.9% and 12.1%, respectively). Moreover, the recourse by banks to Eurosystem funds continues to fall. Notwithstanding this positive assessment, Spanish banks must continue strengthening their capital and their loss-absorption capacity in order to withstand the new macroeconomic environment, heightened competition and the new, more demanding and complex regulatory framework.