relative telecoms prices has deepened, and service providers have increased the variety of packages offered. in fact, competition between operators focuses increasingly on the speed and quality of data services provided through both fixed and mobile means. another encouraging sign is the interest of international players in the mexican market. 1 to turn to our second focus, the energy sector has also suffered from high prices and frequently, insufficient supply. crude oil production has been declining continuously since 2004. inadequate pipeline infrastructure has limited lower - price gas imports, as well as lower - cost, more efficient distribution. electricity prices in mexico remain well above those in its key trading partners. 2 behind these problems lie decades of state control, with little or no benefit from outside participation. the energy reform seeks to confront this reality by allowing private participation in virtually all aspects of the sector. this includes public bidding for oil and gas exploration and production contracts, and permits for production of oil products and petrochemicals, transport, storage, distribution, and sale of hydrocarbons and hydrocarbon products. also, permits are to be granted to generate and sell electric power, as well as import electricity using mexico ’ s national electric system. 3 the reform contemplates a wholesale market for the purchase and sale of electricity, with retail operations also possible. electricity transmission and distribution remain in the hands of the state, with the outsourcing of private contractors permitted. for an analysis of recent price developments in the telecom services sector, see banco de mexico ( 2015 ), informe trimestral, octubre - diciembre 2014, box 1, february. the negative impact of the inadequate infrastructure of the gas pipeline system is illustrated in banco de mexico ( 2013 ), inflation report, july – september 2013, box 2, november. the national electric system is mainly composed of the national transmission and general distribution networks, the power plants that deliver electricity to the national networks, and the equipment and facilities used to control the system itself. bis central bankers ’ speeches as to oil and gas exploration and extraction, four different types of contract are on offer, namely licenses, profit - sharing, production - sharing, and services. in the first three, private companies can register the value of the expected profits backed by the contracts on their books. in the wake of the so - called round zero in which pemex applied for certain fields and was allocated some of them, the first round of public bidding has begun. two auctions have been announced, one for exploration

march. bis central bankers ’ speeches goes, higher interest rates in the united states associated to a stronger economy in that country are a net positive for emerging market economies. • the ongoing efforts from the part of the federal reserve and other central banks in the advanced economies in terms of their communication with the public and the transparency of their decisions, are expected to play a key role on how markets react and emerging economies are affected as monetary policy in those economies goes back to normal. as evidence in support of this argument, it is noted that anticipated interest rate increases by the federal reserve have been followed by minor pullbacks in capital inflows to emerging markets, while the impact of unanticipated moves has been much larger. 6 • after years — and perhaps decades in some cases — of continued policy efforts in some key areas, emerging economies in general are today more resilient than they were in the past to external shocks. on the other hand, there are also compelling arguments calling for extra caution going forward, as international financial markets adjust to monetary policy normalization in the united states : • unconventional monetary policies affect financial markets in a way that differs from the more conventional interest rate policy, and the extent of such difference is largely unknown. for instance, the large - scale asset purchase programs deployed by the federal reserve and other central banks in advanced economies have affected global interest rates along the yield curve through a significant compressing effect on bond risk and term premia, something that does not necessarily follow from changes in short - term interest rates. 7 thus, there is a risk that such premia, and particularly the term premium, quickly decompress, giving rise to an abrupt adjustment of long - term interest rates as the federal reserve begins to tighten. • the marked divergence in the expected path for the federal funds rate between that implied by market instruments ( such as federal funds futures or overnight indexed swaps ) and that obtained from fomc projections and forecasters surveys, increases the possibility of surprises and sharp adjustments in financial markets. • the share of the nonbanking sector in the intermediation of international credit has risen substantially after the crisis, with the growing role of the asset management industry being particularly noteworthy. it has been noted that this kind of investors may be more prone to herd behavior, and therefore emes may be facing an increased risk of contagion during episodes of financial turbulence. 8 it is of course impossible to determine ex ante which of these views is correct.