event of a crisis, the market value of longer maturities would doubtless fall sharply. short - term foreign creditors, on the other hand, are able to exit without loss when their instruments mature. if the preponderance of a country s liabilities were short term, the entire burden of a crisis would fall on the emerging market economy in the form of a run on reserves. some emerging countries may argue that they have difficulty selling long - term maturities. if that is indeed the case, their economies are being exposed to too high a risk generally. for too long emerging market economies have managed their external liabilities so as to minimise the current borrowing cost. this shortsighted approach ignores the insurance imbedded in long - term debt, insurance that is often well worth the price. the essential function of an external balance - sheet rule should be to make sure that actions of the government do not contribute to volatility in the foreign exchange market. consequently it makes sense to apply the rule to all of the government s foreign assets and all sovereign liabilities denominated in, or indexed to, foreign currencies. forward foreign exchange transactions should be recognised, as liabilities, while such things as contingent credit lines, if they are truly available on demand, should be counted as foreign currency assets. in addition, key contingent liabilities should be included. this means that the foreign currency assets and liabilities of financial intermediaries that have access to the safety net - - e. g. banks - - probably ought to be included in the scope of the analysis. it is important to note that adherence to such a rule is no guarantee that all financial crises can be avoided. if the confidence of domestic residents is undermined, they can generate demands for foreign exchange that would not be captured in this analysis. but controlling the structure of external assets and liabilities could make a significant contribution to stability. the adoption of any rule is not a substitute for appropriate macroeconomic, exchange rate, and financial sector policies. indeed, the endeavour to substitute such a regime for the more difficult fundamentals of sound policy will surely fail. countries that choose to follow this simple rule may reduce their vulnerability to financial crises. at a minimum this framework can highlight signs of vulnerability. for example, korea s short - term debts, including those of korean banks, were more than three times its foreign exchange reserves in december of 1996. an external balance - sheet rule could generate substantial benefits for the international community

fact, in the vast majority of cases, the public does not mistrust the opinion of experts. almost no one – regardless of educational attainment or political or religious persuasion – differs with the assessments of experts regarding the best way to build an airplane. the issue typically arises in connection with certain topics, such as global warming or the risk - benefit ratio of vaccines, which are more easily influenced by interests, values and cultural identities. 34 economics and finance are more exposed to this risk than other fields. whether they come from our brain, our community ’ s values, social media, or even the scientific community itself, prejudices are multiplicative — in the sense, first, that failing to remove even just one can nullify the whole communication effort ; second, that even when they are conceptually independent, they tend to interact and reinforce one another. what can we do? despite evidence that it is not always impossible to change ( erroneous ) epistemological beliefs, including through short - term educational measures, 35 there still remain ‘ a host of interdependent complexities for science communication, many of which we are only beginning to understand empirically ’. 36 the conclusion that the science of science communication has reached so far is that there cannot be a popularising or educational solution that fits all topics and all audiences ; that if we ignore the existence of cognitive obstacles, rely on a one - way style of communication and do not ask ourselves what the target audience ’ s knowledge, opinions and prejudices are, we are bound to fail. 37 the interdependency of channels can work in the communicator ’ s favour, too. when the person or institution that sends a message is perceived as independent, authoritative and credible, the ‘ drag ’ of impeding factors decreases. one hopes that central banks will often fit the bill in most people ’ s eyes. this is, i believe, one important reason why they are natural candidates for taking on an educational role. does digitalisation help or hinder financial education? the digitalisation of finance creates both benefits and risks for consumers. 38 innovation allows the financial and payments industry to offer new products ( and thus serve a broader range of needs ), to lower costs, and to improve accessibility. one scarcely remembers that to carry out the simplest banking operations, like checking the balance of one ’ s account or making a money transfer, there was once no alternative to taking the time to go to a physical bank branch