the pboc and the hkma are widely accepted and appreciated by the central banking fraternity. this also shows that the international financial community fully supports the principle of “ one country, two systems ” laid down by the basic law. the basic law also states that the exchange fund shall be managed and controlled by the hong kong government. it also states that the revenues of the hong kong special administrative region shall be used exclusively for its own purposes. in addition, the basic law stipulates that the chinese government will not levy taxes in hong kong. these three - fold safeguards are evidence that china will not interfere with hong kong ’ s financial matters. we have reiterated time and again that under no circumstances will china draw on or resort to hong kong ’ s exchange fund or other assets in any way or for any reason. on the contrary, the pboc will support the currency stability of hong kong. the pboc and the hkma entered into a bilateral agreement on repurchase of us treasury paper early this year. we also stand ready to provide funds to support the hong kong dollar, if necessary. thirdly, the economic development of the mainland has created excellent conditions for the continuity and further strengthening of hong kong ’ s prosperity and stability. economic development in the mainland provides a strong support to hong kong ’ s economic development. china is confident in hong kong ’ s maintaining prosperity and stability after 1997 because we have full confidence in the economic development in china. china is firmly committed to continuing with its economic reform and our achievements are widely recognised. currently, the macro - economic situation in mainland china is steady. the various macro - economic indicators do meet our targets laid down early this year and some even out - perform our expectations. it is anticipated that this year ’ s economic growth will be around 9 %. the retail price is expected to rise by about 7 % and is expected to remain steady over the next two years or may even ease further. at present, our foreign reserves are over us $ 90 billion and are expected to exceed us $ 95 billion by the end of this year. since the beginning of the second quarter this year, external trade has posted some steady growth. there is a significant inflow of capital and our balance of payments is in a healthy position. therefore the exchange rate of the renminbi, which is determined by the market, will remain stable. the renminbi, for all intents and purposes has become fully convertible in the current account. we are

pablo hernandez de cos : navigating through a storm - policy challenges in the current macro - economic environment introductory address ( via video ) by mr pablo hernandez de cos, governor of the bank of spain, at the pannel " navigating through a storm - policy challenges in the current macro - economic environment ", during the sixth european systemic risk board annual conference " addressing financial stability challenges ", frankfurt am main, 8 december 2022. * * * good afternoon everybody and welcome to this first discussion panel of the sixth annual conference of the european systemic risk board. in this roundtable, we will be discussing and sharing views on identified challenges affecting the conduct of policies in the current turbulent times, which are having important repercussions for the economic and financial environment. as noted by president lagarde, during her welcome address, in the course of this year we have witnessed an increase in financial stability risks. the appalling invasion of ukraine by russia, initiated as we were recovering the activity levels previous to the pandemic, has contributed to either fuel new or exacerbate existing systemic vulnerabilities in europe and beyond. spikes in energy and food prices, continued disruption of global supply chains and demand pressures have resulted in higher and more persistent inflation across the board. this has triggered a response of monetary policy, which is now normalising around the world, contributing to tighter global financial conditions and increased volatility and liquidity tensions. and it is the combination of the uncertainty derived from the war ( and more in general from geopolitical tensions ) with the increase of inflation and the rising interest rates that has generated, ultimately, a general deterioration of the economic outlook with, for example, one - year ahead recession probabilities having increased markedly, in both the euro area and other major advanced economies. this challenging financial stability outlook is well laid out in the warning on vulnerabilities in the eu financial system that the european systemic risk board issued last september. indeed, the esrb has alerted of the heightened uncertainty and the increased probability of tail - risk scenarios materialising. in particular, the esrb has warned of three severe systemic risks : 1 / 3 bis - central bankers'speeches ( i ) first, the deterioration in the macroeconomic outlook combined with the tightening of financing conditions, leading to negative consequences in terms of balance sheet stress for non - financial corporations and households, especially in sectors and member states that are most affected by rapidly increasing energy prices