be to external disturbances, own calculations based on the international financial statistics database, imf. dudley, w. ( 2014 ), “ u. s. monetary policy and emerging market economies. ” remarks at the roundtable discussion in honor of terrence checki : three decades of crises : what have we learned?, federal reserve bank of new york, new york city, march. bis central bankers ’ speeches empirical evidence to support this hypothesis is inconclusive. thus, the authorities should continue to watch the financial risks carefully. 7 the mexican economy during the last decade, mexico ’ s economic growth was, on average, lower than that observed in other emerging markets. several factors may help explain this. one is high integration with the u. s., where gdp has remained below the long - term trend since the crisis. another is that mexico is mainly a manufacturing exporter, and thus it did not overly benefit from previously booming commodity prices. third, long - stagnant total factor productivity reveals pervasive inefficiencies in the economy. furthermore, since the middle of 2012, mexico was hit by a succession of domestic shocks, including the bankruptcy of major housing developers and a contraction in public investment. in 2014, the economy started to pick up, driven first by more dynamic exports of goods and services, and more recently, by stronger private domestic demand. third - quarter data on industrial production and retail sales suggest that momentum continues. the broad - based outlook is one of gradual recovery during the rest of this year and in 2015. 8 both upside and downside risks to the growth scenario are present, with upside risks prevalent. these include the possibility of faster - than - expected u. s. economic recovery and positive effects from structural reforms implemented during the last couple of years to enhance productivity in many sectors of the economy. on the downside, less favorable international conditions could dampen activity. market reactions in mexico to external financial volatility in the last year and a half have been relatively manageable. the peso has depreciated less than many other emerging - market currencies, a noteworthy fact given the absence of intervention in the foreign exchange ( fx ) market. also, both the fx and bond markets have been orderly, with traded volumes and bid - ask spreads tight. furthermore, peso - denominated bond holdings by nonresidents have remained relatively stable for the last two years, despite being at high levels, suggesting that investors are taking

support the calibration of macroprudential instruments. in turn, by subjecting the banking sector to specific shocks, a macroprudential stress - testing framework can help in assessing the capital shortfall in times of stress. whereas traditional stress - testing frameworks focus on initial capital shortfalls, macroprudential stress - testing frameworks quantify the propagation of costs for banks and the real economy over time. this is the aim of the macro - micro approach, which takes into account the heterogeneity in banks ’ reaction functions. more generally, stress - testing has become a key instrument in the macroprudential and financial stability toolkit for assessing risks to the banking system in adverse conditions. the bottom - up approach used in the context of the eu - wide stress test relies on banks ’ own reporting of projections based on common scenarios and gives national supervisors and the ecb an important role with regard to quality assurance. recent research provides tentative evidence that “ supervisory scrutiny ” relating to quality assurance has a disciplining effect on banks ’ risk - taking. we also need to understand how banks will react to the policy measures that are applied to them. a dynamic micro - founded structural model of bank behaviour examines changes in capital and liquidity requirements and confirms considerable heterogeneity among banks ’ reactions. moreover, our 3d model, with default modelled in the household, non - financial corporations and banking sector, has been successfully used in various policy exercises and exemplifies how cutting - edge research can help inform policy decisions. the role of macroprudential policy so what is the role of macroprudential policy in the current environment? the financial crisis showed that macroprudential policy is needed to complement supervisory scrutiny by accounting for system - wide macro - financial feedback loops. macroprudential policy is called to act countercyclically, tightening requirements when we see excessive risk - taking and loosening them to avoid a credit crunch when risks materialise. since the crisis, the resilience of euro area banks has improved significantly and their capital level is currently considered to be adequate. however, in addition to the level of capital, also its composition deserves appropriate consideration. the macroprudential buffers that are currently implemented in the ssm banking system are of a predominantly structural nature and are thus expected to be maintained over the cycle. the countercyclical capital buffer ( ccyb ) is the only buffer that is intended to be released