debt and the expanded role of nbfis in the region. let me talk about these vulnerabilities from an fsb perspective, with a focus on emes and the asian region. 1 / 3 bis - central bankers'speeches the global financial system is transitioning to a higher interest rate environment. financial institutions and market participants have not experienced sharply rising interest rates for a long time, making this adjustment to a world of higher rates challenging. earlier this year, amid shifting financial conditions, we witnessed the first failure of a global systemically important bank since the 2008 global financial crisis. in addition, a few medium - sized bank failures also rang alarm bells. contagion from these individual bank failures was limited, thanks to the swift and coordinated actions of authorities across the globe and to the confidence in the resilience of the broader financial system. this resilience is underpinned by the g20 reforms introduced following the global financial crisis. still, further strains in financial markets cannot be ruled out, as the dynamics associated with the transition to higher interest rates play out over time. market conditions for the larger emes have been fairly stable. but, the recent slowdown in economic growth – and rising interest rates in some jurisdictions – could make it more challenging for some economies to service high debt levels. at the same time, increasing government debt and the withdrawals of foreign investors in the wake of the pandemic have strengthened the " sovereign - bank nexus ". this may lead to speedier transmission of shocks between sovereigns and banks and threaten bank macrofinancial stability. one particular issue that could arise relates to the interaction of us dollar funding and external vulnerabilities in emes. for most of the decade prior to the covid - 19 pandemic, capital flows to emes were supported by abundant global liquidity and a hunt for yield among investors to boost their returns. these inflows provided emes with the benefits of greater access to international capital markets, but also contributed to the build - up of vulnerabilities. non - bank financial intermediaries ( nbfis ) have played an increasing role in funding eme external debt. while this development added to the diversity of eme funding sources, it also created new challenges. as the global financial system continues to digest higher interest rates, there is the possibility that this could affect capital flows to emes. in a more extreme scenario, nbfis and others might withdraw their investments in

wu xiaoling : strengthening china ’ s financial industry in the process of opening up speech by ms wu xiaoling, deputy governor of the people ’ s bank of china, at the sino - us economy and trade forum, beijing, 14 february 2006. * * * ladies and gentlemen, it is a great pleasure to join such a distinguished audience to discuss about issues related to trade and economic cooperation between china and the united states. as two large countries in the world, china and the united states maintains a friendly cooperative relationship between each other not only fits in with their respective fundamental interests, but also helps to create a favorable environment for world development. it is an independent choice of the chinese people to embark on the way transiting to the market economy and it is an internally generated force that pushes china to open to the outside world and actively integrate into the world economy. opening up has not only brought china vitality, but also deepened the reform process which helped to create a better platform for the chinese economy to integrate into the world economy. china is developing in the process of opening up while the rest of the world is benefiting from china ’ s development. china ’ s financial industry has also benefited from the opening up process. in october 1979, mr. deng xiaoping, the late architect and mastermind of china ’ s reform and opening up, asked mr. rong yiren to establish the china international trust and investment corporation ( citic ), a holding company with its business spreading from the financial sector to various other industries. the incorporation of citic has opened for china a window to the outside world in terms of external financing. after that, china began to introduce foreign financial institutions in the country by allowing them to set up representative offices, operational entities and even joint - equity institutions in china, turning a new chapter in the reform and opening up of the chinese financial industry. it is the financial reform and opening up that has brought china out of the rigid doctrine that confined the country to a self - pride fallacy of “ a nation of no domestic and external debt ”, and helped china to learn to use financial instruments and foreign capital to develop the chinese economy. in conventional chinese wisdom, borrowing debt becomes a feasible choice only when other options are exhausted. in the past, a chinese usually needs to save several months or even years before he or she could offer to buy some relatively expensive goods, and borrowing money is considered to be something shameful and reflecting one ’ s incapability. under