extreme complications the world economy is suffering from the see levine, r. ( 2005 ), “ finance and growth : theory and evidence ”, in p. aghion and s. durlauf ( eds. ), handbook of economic growth, edition 1, volume 1, chapter 12, p. p 865 – 934, the netherlands : north holland. commercial bank credit to the non - financial private sector as a proportion of gdp was 30. 4 percent in december 1994 and 13. 9 percent in september 2011. as of august 2011, the number of commercial bank branches was 11, 552, while the number of banking agents was 12, 260 ; a total of 41 percent of municipalities, accounting for 5. 4 percent of the total population, still did not have bank branches, atms or banking agents ; mexico counted 96. 4 million mobile phones and 19. 2 million fixed telephone lines. bis central bankers ’ speeches financial excesses that led to the global financial crisis. at the same time, regulation should not inhibit the innovation and flexibility necessary for the banking system to accomplish its mission. as i said, mexico has made substantial improvements on regulation and supervision. however, the agenda for financial authorities needs to embrace the further enhancement of micro - prudential standards for banks, such as capitalization and liquidity requirements ; macro - prudential measures to detect early systemic risk factors and counteract them ; and the design of an expedient bank resolution mechanism. 6 economic outlook during the third quarter of 2011, the mexican economy continued the process of recovery that began two years earlier. in particular, during july and august, the latest months for which full production data are available, the general indicator of economic activity ( igae ), a monthly gdp proxy, exhibited a year - on - year average rate of growth of 3. 8 percent, slightly higher than the corresponding figure in the previous quarter. even though in august the level of the igae surpassed that of june, different economic indicators suggest that the rebound is losing steam. for example, the increase in activity in july was followed by a contraction in august. this fall occurred both in the industrial and service sectors, which account for approximately 95 percent of total output. the lower activity was partly compensated for by a significant rise in agricultural production, mainly as a result of government support programs for re - sowing land after harvest losses due to bad weather in the first quarter of 2011. deceleration was clearer in

##s or the adoption of protectionist measures. my suggestion for macroprudential policy is that the international community should develop “ best practices ”. whenever possible, central banks should be entrusted with their management, drawing a clear line with monetary policy actions, and they should assure that, bis central bankers ’ speeches at a minimum, macroprudential policies are transparent ; targeted to a specific market failure or externality ; and preferably be transitory. in sum, in the case of rapid capital inflows, emes ’ central banks should : pursue as a primary objective a low and stable rate of inflation, allowing market adjustments in interest and exchange rates, unless such adjustments could lead to an unacceptable equilibrium and threaten future financial stability ; and second, if such non - equilibrium adjustments are a possibility, use transparent, well targeted and transitory macroprudential measures. now the third, and not unrelated, challenge. the recent problems facing emes ’ central banks since may and june have not been related to capital inflows, but outflows. these have generated market responses that in some cases were more violent than those in the wake of the lehman brothers collapse, in terms of exchange rate volatility and increases in long term interest rate. a key point here is that by and large, markets have differentiated among emes – those with better fundamentals and fewer vulnerabilities have fared better. the main lessons for emes : – today it is a must to have a strong external position, characterized by a low current account deficit, substantial international reserves, long duration in the public debt, and if possible contingent international financing, as in the cases of mexico, colombia and poland with the imf flexible credit line ( fcl ). additionally, it is important to have a flexible exchange rate regime, in combination with a flexible and credible inflation targeting framework. – finally, there is also a premium for conservative fiscal policies and sustainable public debt levels and projections. even with these elements in place, as ump in ae are unwinded, capital outflows will follow, domestic interest rates will increase, and financial conditions could become very turbulent. from the emes point of view the only adequate response, is one that is comprehensive and consistent, involving fiscal, financial and monetary policies. central banks cannot deal with this kind of situation alone ( say, by raising interest rates and / or selling foreign exchange in the market ). to overburden central banks with the defense of