the following public policy anchors : 1. same risk / same regulation. 2. interoperability and neutrality. 3. no kingmakers, to avoid that entities extend the former ’ s market power and concentration to financial markets. 4. business continuity with large foreign providers, since the failure of a payment service provider could have substantial spillovers. 5. addressing jurisdictional gaps, to ensure an effective monitoring of financial services ’ activities and an efficient cooperation between regulators across jurisdictions. 6. client protection, in particular for the use of financial data. 7. cybersecurity. • developing this public infrastructure should be at the top of the local and international agenda since payment systems are inherent to central banks as a key element in their role of providing money. sustainability and climate change • finally, other exogenous challenges have gained relevance. in particular, climate - related risks, which are global in nature. • the financial system could play an important role in aligning incentives and setting the ground for the internalization of climaterelated externalities. • the role of central banks on climate - related financial risks is precisely to foster such alignment of incentives. we should make use of the existent international coordination frameworks to tackle climate risks. • also, climate risks imply material financial risks affecting all countries and sectors. just as we carefully and continuously monitor traditional financial risks, material risks related to climate change must be integrated into the risk - management routine performed by financial institutions and supervisors. • open emerging market economies are highly vulnerable to external shocks related to climate policies. these shocks can be caused by carbon pricing policies, tariffs, and fiscal policies. recent proposals to establish minimum carbon prices must consider per capita income and carbon intensity. • international organizations such as the network of central banks and supervisors for greening the financial system ( ngfs ) and the financial stability board ( fsb ) have contributed to launch a coordinated agenda to improve the resilience of our economies and prepare the financial system to manage these risks. • the initiative of the international financial reporting standards ( ifrs ) foundation to prepare minimum disclosure standards in conjunction with the task force on climate related financial disclosures ( tcfd ) will help to raise awareness among financial institutions and non - financial companies, so that blind spots in the efforts to promote financial stability and in the transition to a lowcarbon economy can be avoided. • traditional regulatory instruments, such as capital requirements, may not be adequate to address these new risks. we must encourage forward - looking methodologies

remarks by alejandro diaz de leon, governor of banco de mexico, at the 13th annual conference by the central reserve bank of peru, the re - inventing bretton woods committee, and the interamerican development bank “ the next global financial cycle in a divergent global economy, panel : central banking in a new era? ” july 23, 2021 introduction • first, let me thank the organizers of today ’ s conference. it is an honor to share this panel with my colleagues. • to address today ’ s panel “ central banking in a new era? ” i will make some remarks on four topics : i ) monetary policy ; ii ) financial stability ; iii ) payment systems, and iv ) climate change. challenges for monetary policy • regarding monetary policy, central banks in emerging economies face a more complex set of trade - offs than their counterparts in advanced economies. • in small, open economies, which supplement domestic savings with external financial resources, it is essential to preserve a sound policy mix to foster an orderly adjustment of the economy to adverse shocks and to attract capital inflows. • in these economies, external and idiosyncratic shocks not only affect the demand side, but also the supply side and financial markets, which tends to increase policy trade - offs. • in advanced economies, in the last decades, several structural factors and demographic trends have induced lower potential gdp growth, lower inflation, and a lower real neutral interest rate. • this has resulted in a sustained trend of low - and below - target inflation for long periods of time. this allows advanced economies ’ central banks to be extremely patient in the wake of higher inflation. • emerging markets are not in the same position. we have less policy space, price formation has not been dominated by chronically low inflation, and inflation expectations have not been persistently below target. we need to be mindful of a more flexible and agile price formation process. • in addition, as we have been recently reminded, emerging market economies continue to be exposed to different types of adverse idiosyncratic factors that limit investment, growth, and hamper development. • furthermore, the complex post - pandemic environment poses significant challenges : 1. the global economy is highly heterogeneous and in uncharted territory. 2. fiscal support, mainly in the us, is currently at unprecedented levels, helping the recovery but adding inflationary pressures. 3. post pandemic price and wage dynamics are highly uncertain. 4. recent changes in