driven ), will no longer be very useful. 3 what is the appropriate policy response to the challenges posed by macrofinancial linkages? in view of the far reaching effects of monetary policy, the dominant view is that it is essential to use an instrument with more direct effects and with a systemic perspective of the financial system. consequently, the standard recommendation is to use macroprudential tools as the first line of defense. i share the view that macroprudential measures should have a prominent role in the pursuit of financial stability. but i am also convinced that we must be well aware of the limitations that we face in using these tools. to start with, despite the substantial increase in research on financial stability issues in the aftermath of the crisis, the theoretical foundations for macroprudential policy are at an incipient stage and still far from being able to provide the basis required to design integrated policy frameworks in this area. in addition, the interactions between macroprudential policies and measures in other fields, particularly monetary policy, should be carefully considered ; however, to date, they have not been sufficiently analyzed. also, since recognition of the role that macroprudential policy can play in financial stability is relatively recent, empirical evidence on the effectiveness of these instruments is scarce. furthermore, it is indispensable to establish adequate institutional arrangements for the design and implementation of macroprudential policies. it must also be considered that macroprudential policies do not affect activities not subject to traditional banking regulations, i. e. shadow banking is outside their reach. therefore, it is difficult to expect that financial stability can rely on the use of macroprudential policy alone. all the contrary, the complexity of this issue, and the uncertainties and limitations that surround the use of macroprudential instruments, imply the adoption of a comprehensive approach that includes, in addition to the latter, traditional monetary, fiscal and microprudential tools. it is also important to bear in mind that although normally this will not be the first line of defense, there will probably be instances where monetary policy will need to respond directly to financial stability risks. in view of close inter - country links, and the consequent global risks, international cooperation, be it through bilateral or multilateral means, based on either a preventive or a crisis - response approach, will frequently be an important component of the policy response. clearly, the financial system will have a healthier development in efficient economies

as narrow and that in recent times has fluctuated around 2 percent of gdp. this magnitude is lower or much lower that the one you observe in countries with the same development level of mexico. the scarcity of resources to finance public investment is hindering the growth capacity of the mexican economy and preventing the possibility of elevating competitiveness. in other words, the fiscal problem has materialized in sub - par investment levels entailing high social costs. numerous needed physical and human investments, i repeat, are not materializing because of the lack of resources and because resources are focused on areas that do not result in large benefits. with higher fiscal revenues, comparable to those obtained by countries of the same economic development, it would be possible to improve the development of our human capital at this historic moment. if we are not able to do so, it is possible that the opportunity to use the demographic bonus, derived from the fact that mexico will have a large proportion of young people, will vanish. there are many concrete cases in which budgetary constraint is postponing the realization of investments of great potential benefit. one example is natural gas. despite the fact that we have huge natural gas fields, in recent years mexico has been importing natural gas because of the lack of funds to finance the investments that would allow for exploration and transportation. also, we need a proper legal framework that allows private - sector participation in natural gas development and exploitation. it is urgent that mexico modernize the electricity industry in order to reduce the costs associated with the generation of electricity and to improve operational quality, with the aim of increasing mexico ’ s development capacity and at the same time extending investment in the sector in order to satisfy future electricity demand. last but not least, labor reform would allow mexico to have a much more flexible economy, with higher productivity. we should not forget that our main trading partners, canada and the united states, have very flexible economies. the canadian case stands out because the canadians were capable of making their public finances sound and making the labor framework more flexible. in canada, market flexibility allowed for a drop in unemployment and more efficient participation of the labor force in the production process. in fact, canada, an economy closely linked to that of the united states, has avoided recession, maintaining a well - balanced and strong growth pattern. although the structural reforms i have mentioned are crucial, there are other important complementary tasks that have to be completed at all government levels and by society itself to make it possible to eleva