gdp in 1990 to over 20 percent on average today. precautionary reserve accumulation, however legitimate, unavoidably creates side effects for domestic macro policies as well as spillover effects on other countries. stabilizing the demand for international reserves would therefore bring huge benefits in terms of world welfare. the need for national reserves could be reduced if credible mechanisms exist to provide for the supply of official liquidity on a multilateral basis. hence the current search for international financial safety nets which has taken first stage in the g20. finally, i would like to say a few words about financial development. differences between countries, are striking, whether one looks at capital account regimes, the broadness and debt of domestic financial markets or, more generally, their ability to generate locally a sufficient supply of safe and liquid assets. some of those differences reflect true social choices and preferences that must be respected and accommodated. others result from deliberate or inadvertent policy ‐ induced distortions, which should be reduced or eliminated. domestic financial imperfections and frictions in international capital flows interact with each other to create and amplify imbalances. ultimately, financial instability is a product of this interaction. part of this instability shows up in exchange rates movements. it is very unlikely that a global capital market driven by constant frictions between highly different domestic financial systems would lead to a stable – and fundamentals based – equilibrium in foreign exchange markets. ensuring that our different financial systems interact harmoniously should be a policy priority. greater compatibility in approaches to financial regulation between advanced and emerging economies is within reach. significant advances are being made. the institutional framework has adjusted to the new world reality. emerging economies, now fully take their part and role in the constellation of committees which, in basel, work on defining core principle of financial regulation. the largest sit as full members of the financial stability board, and its steering committee. finally, a landmark agreement on imf reform reached at the last g20 meeting has fully recognized their role and place in the new financial environment. i am therefore confident that we can – and will – make progress in tackling the difficult issues we face and build a better and safer world financial system.

bank ( ecb ). in addition to individual efforts, coordinated global action is gaining momentum as well. at the one planet summit held in december 2017 in paris, a group of central banks set up the network of central banks and supervisors for greening the financial system ( ngfs ). in slightly more than three years, over 80 central banks worldwide joined this network, which indicates that environmental challenges rank high among central banks ’ priorities. in september 2019, the bank for international settlements launched an open - ended fund for “ green ” bond investments by central banks. the aim was to help central banks to incorporate environmental sustainability objectives in the management of their foreign exchange reserves. the trends are clear and unambiguous. an increasing number of global participants are becoming involved. still, we need to be reasonable in this as in all other cases. for, while it is important to take timely and adequate action, consistent with global initiatives, towards “ greening ” the domestic economy, it is equally important not to become part of a new “ fashion ”, a wrong current led by popular ideas. all that glitters is not gold, as the old saying goes! this is why we must not be swayed by fashion and trends or take action just because “ everyone else is doing it ”. we must analyse well our own scope and possibilities of action, in order for benefits to outweigh the negative effects. the nbs has been analysing these developments for quite some time, keeping abreast of changes in the international environment. as in all other aspects of our work, we always take carefully weighed up measures resulting from comprehensive analyses. only this way can we be sure that any adjustments we make will be implemented in the right manner. it has never been our goal to take “ random ” decisions, for the sole purpose of keeping up with global “ trends ”. we would never allow the central bank ’ s activities to be the grounds for “ greenwashing ” – an equally present trend where funds earmarked for environmental projects are used for other purposes. this not only devalues individual projects, but also the entire concept of a “ green ” economy. the importance of environmental protection and climate change for our country has been confirmed by the recent adoption of the law on climate change. its effects in the medium term 2 / 3 bis central bankers'speeches could strengthen serbia ’ s resilience to the negative consequences of climate change, as well as improve the local environment, air quality