Concerns persist about the fragility of the Chinese financial system, which together with doubts about the evolution of real-estate prices could limit its future growth prospects. As has been noted before, China’s evolution is cause for unrest because of its weight in world GDP and its impact on the pricing of commodities, copper included. The volatility that financial markets have shown in recent months implies that ending the quantitative easing in the U.S. will not be stress-free, especially because of the difficulty to calibrate the policy actions of this unprecedented process. In this regard, a major risk has to do with its effects on some of the larger emerging economies that have accumulated macroeconomic imbalances and are more dependent on external financing. The risk associated with the complex interaction between weak growth, a frail fiscal situation and financial problems in Europe is still present. At home, headline inflation of recent quarters has been lower than forecast, and the moment when it will expectedly reach the target has been postponed time and again. While the recent cuts to the MPR will help inflation converge to 3 percent, if the widespread slowdown in all the demand components is confirmed, along with longer-lasting low inflation in the rest of the world and maybe a sharper fall in international fuel prices could further postpone such convergence to 3 percent. However, the depreciation of the peso and the still tight labor market could work in the opposite direction.

As a central bank with a mandate to promote financial stability, it is our duty to ensure the safety of funds when they are most vulnerable, in particular once funds have left the bank. In response to these modern threats, central banks have strengthened risk management frameworks and implemented awareness programmes both internally and for the public. However, some of the risks we are addressing, while familiar, are beyond conventional central bank expertise. The complexity of the challenge requires public-private cooperation to strengthen mutual expertise and build solutions. Some of the risks, such as cyber threats, also transcends national borders. Solutions must involve international collaboration, such as the ASEAN initiative on Cybersecurity Resilience and Information Sharing Platform (CRISP). This platform allows central banks within the region to share cyber-related information and encourage capacity building. It is a testament to the interconnected nature of financial services that national financial stability requires international cooperation. Closing The pace of innovation in payment services combined with the economic effects of the pandemic are putting pressure on authorities to make progress on cross-border payment issues. In addressing these issues, we have to be mindful of the fact that not all central banks are progressing at the same pace. What is important is the common direction that central banks adapt to change to build a stronger and more robust financial system for all. With this in mind, there are questions that I hope the Forum can attempt to answer. First, how can central banks create a safer environment to facilitate cross-border payments?