risks from a commercial firm to its bank : i ) first, by limiting related - party transactions between the bank and its commercial firm owner and requiring that their relations are conducted at market prices, ii ) second, by aligning the incentives of banks ’ board members and managers. for example by requiring that the majority of banks ’ board members remain independent from the controlling firm or other affiliates of the conglomerate. and iii ) third, through the analyses and risk assessments of the financial positions of the entire group. in order to gain a meaningful idea of the risks of a large conglomerate, some financial authorities have suggested that supervision must cover the relevant risk positions of the letter to congressman james a. leach, january 20, 2006. board of governors of the federal reserve system. entire group. this constitutes a formidable challenge. legal amendments would have to be made to compile basic management information on financial condition and risk exposures of the group as a whole. it is also important to send a clear message that the bank will be able to stand alone if the commercial owner gets into trouble, and thus banks ’ depositors and creditors do not need to run for the exit. other conflicts of interest likely to surface when commercial firms become bank owners are the anticompetitive practices that commercial firms may conduct once they have a bank. for instance, commercial firms may require their suppliers to have their financial services arranged by their banks. banks belonging to a commercial firm may also engage in tied selling practices by, for example, extending consumer credit only for purchases made in the commercial retailer. finally, we should be very careful with the protection of personal data to prevent the non - authorized transfer of personal information ( bank secrecy ). final remarks embracing globalization brings both benefits and challenges. the evolution of the financial industry in mexico constitutes a good example. openness to foreign direct investment in the financial system was essential to recapitalize the banking sector and increase efficiency. it also brought other benefits, such as new technologies and products, and advanced risk management techniques. however, it is important that the authorities continue to foster competition through transparency and disclosure, as well as new entrants to the system without increasing the risks to it.

javier guzman calafell : groundbreaking shifts in the international financial system remarks by mr javier guzman calafell, deputy governor of the bank of mexico, during the conference “ groundbreaking shifts in the international financial system ”, organized by “ the us - korea institute at johns hopkins school of advanced international studies ” and “ the reinventing bretton woods committee ”, washington dc, 17 april 2015. * * * the views expressed in this document are strictly personal and do not necessarily coincide with those of banco de mexico ’ s board. i thank the organizers, and especially marc uzan, for the invitation to participate in this panel. the global financial crisis has been a painful reminder of the crucial importance of macrofinancial linkages for financial stability. in particular, it has shown how interactions between the real and the financial sector can give rise to “ procyclicality ” and thus to systemic risk, especially through their impact on the value of assets and leverage. it has also become evident after the crisis that common risk exposures by financial institutions, or the interconnectedness among institutions or markets, can also be a source of systemic risk. naturally, there may be a close relationship between both sources of systemic risks, and in fact they frequently arise simultaneously. the international community has made a major effort to take on board the lessons for financial stability deriving from the global financial crisis. thus, new bank capital, liquidity and leverage rules have been introduced under basel iii to reduce procyclicality and crosssectional systemic risks ; special measures have been designed for systemically important firms ; stress tests are conducted to make sure that banks can continue to operate under very difficult conditions ; accounting standards have been strengthened ; reforms have been introduced to address some of the risks related to the nonbank sector ; new standards for the financial infrastructure, with particular attention to the derivatives markets have been developed ; and in general a macroprudential approach for regulation and supervision has been emphasized. the measures implemented after the crisis have contributed significantly to mitigate some of the vulnerabilities that precipitated it. however, the challenges arising from macrofinancial linkages have not disappeared, and in fact a number of new risks have emerged. let me touch briefly on some of these issues. in the first place, notwithstanding the efforts made, some of the difficulties that surfaced during the crisis have not been fully tackled. • balance sheet repair of the non - financial sector in advanced economies is a case in