term rates of return to capital rather than accept more moderate returns stretched over a longer horizon. we must continuously remind ourselves that financial infrastructure comprises a broad set of institutions whose functioning, like all else in a society, must be consistent with the underlying value system and hence its time preference. on the surface, financial infrastructure appears to be a strictly technical concern. it includes accounting standards that accurately portray the condition of the firm, legal systems that reliably provide for the protection of property and the enforcement of contracts, and bankruptcy provisions that lend assurance in advance as to how claims will be resolved in the inevitable result that some business decisions prove to be mistakes. such an infrastructure in turn promotes transparency within enterprises and corporate governance procedures that will facilitate the trading of claims on businesses in open markets using standardized instruments rather than idiosyncratic bank loans. but the development of such institutions is almost invariably molded by the culture of a society. the antipathy to the “ loss of face ” in asia makes it difficult to institute, for example, the bankruptcy procedures of western nations. and even the latter differ from one another owing to deep - seated differences in views of creditor - debtor relationships. arguably the notion of property rights in today ’ s russia is subliminally biased by a soviet education that inculcated a highly negative view of individual property ownership. corporate governance that defines the distribution of power, of course, invariably reflects the most profoundly held societal views of the appropriate interaction of parties in business transactions. it is thus not a simple matter to append financial infrastructure to an economy developed without it. accordingly, full convergence across countries of domestic financial infrastructure or even of the international components of financial infrastructure is a very difficult task. nonetheless, the competitive pressures toward convergence will be a formidable force in the future if, as i suspect, additional forms of financial intermediation will be increasingly seen as benefiting an economy that develops capital markets. moreover, a broader financial infrastructure will also likely be seen as strengthening the environment for the banking system and enhancing its performance. the result almost surely will be a more robust and more efficient process of capital allocation, as a recent study by ross levine and sara zervos suggests. 1 its analysis reinforces the conclusion that financial market development improves economic performance, over and above the benefits offered by banking sector development alone. the results are consistent with the idea that financial markets and banks provide useful, but different, bundles of financial services. it is no coincidence that the lack of adequate accounting

, and harrison shieh. their paper analyzes macroeconomic data from advanced and emerging economies in the 1980s and 2020s to highlight differences in how u. s. monetary policies have impacted emerging markets in these two distinct periods. the second paper in this session, by francisco legaspe and liliana varela, will show how country - specific risks, such as political uncertainty and risk on debt repayment explain excess returns from investing in local currency assets in latam countries. finally, a policy panel featuring elias albagli, jean - marc natal, boris hofmann, and ricardo reis will offer insights into the future of interest rates and their implications for monetary policy in emerging economies. 5. acknowledgements i would like to especially thank atif mian for being the external organizer of this conference, as well as locals sofia bauducco, mariana garcia and lucciano villacorta for putting togethersuch a wonderful program. i also thank all the speakers and contributors and look forward to the conference volume that we will publish in some months with its formatted contents. let me finish by thanking maria jose reyes, constanza martinelli, carolina besa, daniela gaete, daphne guiloff, pablo barros, and both the public affairs department and the economic research department of the central bank of chile for all their invaluable help managing the logistics of organizing this annual conference. i wish you a fruitful discussion over the next two days. thank you. 5 / 5 bis - central bankers'speeches