, currency depreciation, external debt repayment pressures, and even a financial crisis. since 2022, with the rapid tightening of financial conditions in the united states, the global financial cycle has moved into a downward phase, and emerging economies have once again faced pressures such as the depreciation of their currencies. from may 2021 to september 2022, the us dollar index rose from 89 to 114, an increase of 28 percent, on a par with the rise from mid - 2014 to early 2017. during the same period, the jp morgan emerging markets currency index declined 17 percent, a significantly smaller drop than the 29 percent decline between mid - 2014 and early 2017. 1 / 3 bis - central bankers'speeches this round of currency depreciation in emerging economies is relatively small, and there are three main reasons. first, the foreign exchange reserves of emerging economies have continued to grow, offering a thicker buffer against capital outflows. second, many central banks of emerging economies have won the initiative by starting their interest rate hiking cycles ahead of the fed. third, commodity - exporting emerging economies have been lifted by the rising global commodity prices. although the current downturn in the financial cycle has a weaker impact on emerging economies than the previous ones, some emerging economies with weak economic strength and high dependence on external financing are still under great pressure to repay their debts. in recent years, china's financial cycle has remained relatively stable. since 2020, the yield on 10 - year government bonds has fluctuated within a narrow range between 2. 4 percent and 3. 4 percent. the difference between the highest and lowest points is less than 100 basis points, which is significantly smaller than the nearly 400 basis points in the united states during the same period. besides, the aggregate financing to the real economy ( afre ) in china has maintained a growth rate of around 10 percent. the reason behind the relative stability of china's financial cycle is that the country has maintained a sound monetary policy for a long term. china's monetary policy focuses on domestic conditions while balancing internal and external equilibria with proper intertemporal adjustments. instead of following the fed's policy, we avoid great volatility in releasing or draining liquidity, and do not advocate competitive zero interest rates or quantitative easing. china's stable financial cycle creates a suitable environment for its economic performance and financial market operation. the market liquidity remains adequate at a reasonable level, providing sufficient and stable financing

: to find that out, we will be closely examining the balance sheets of banks in the coming year. no conclusive judgement can be reached prior to that. but the banking system is now in a much better position than four years ago. since then, around €0. 5 trillion of fresh capital has flowed into the euro area banks and many institutions have changed their business models. what is also certain is that almost all banks have been operating much more profitably and with lower costs. spiegel : you paint a very positive picture of the euro area, but many german policymakers remain very critical of ecb policy. how much longer can the conflict between you and bundesbank president jens weidmann go on? draghi : i would rather speak of convergence than of conflict. our positions have clearly moved closer to each other and cooperation has improved. take the recent interest rate reduction, bundesbank president jens weidmann initially had some reservations, but then he said that this step was justified. i have often said that i have great respect for the bundesbank as an institution and for what it means to the germans. bis central bankers ’ speeches spiegel : that sounds rather like christmas harmony. some economists in germany speak of the “ club med ” when they talk about the majority of southern europeans in the governing council and accuse you of copying the inflation policy of the bank of italy in the 1970s. draghi : there are only a few who are insinuating that i am helping italy because i ’ m italian. this doesn ’ t affect me. i have proved often enough that i adhere strictly to the mandate of the central bank and run a policy for the entire euro area. this is also true of my colleagues in the governing council. no one there thinks in nationalist categories ; that applies more to those who voice such unjustified criticisms. spiegel : but ecb policy is very sceptically viewed not only by the bundesbank, but also by the federal constitutional court. probably at the beginning of the year, the court will decide whether the ecb ’ s bond - buying programme complies with the basic law. are you worried about the verdict? draghi : there is no point in thinking about a court ruling beforehand. but we are certain that with all our monetary policy decisions we are operating within our mandate. spiegel : many expect you that the judges will set a limit on government bond purchases. what will you do then?