only consistent momentum in credit growth can lead to strong net benefits for the economy. the recent financial reform the recently approved, multi - layered financial reform contains measures that may strengthen the banks ’ institutional framework, allowing for more robust and sustainable credit expansion, among other benefits. three sets of measures that stand out seek more effective propertyrights protection for creditors, more formal regulation and the promotion of competition among financial intermediaries. on the subject of creditors ’ property rights, the reform makes significant progress towards correcting problems observed in the application of the bankruptcy law approved in 2000. specifically, the new legislation closes loopholes which debtors had been using to prolong the debt resolution process in areas such as intercompany liabilities, director and manager responsibility, while it makes bridge lending in cases of liquidity crunches more feasible. the reform reduces obstacles to expediency in the judicial process to recover collateral, illustrated by the possibility for debtors to choose the court level and select assets to be seized. an important innovation is the founding of specialized commercial - law courts at the federal level. in the field of regulation, the reform provides rules for the authorities to manage the resolution or liquidation of banks in cases of liquidity squeezes and insolvency. the specifics cover lending of last resort with equity shares as collateral, bank contingency plans for adverse scenarios, and ring - fencing actions, for example, in the case of majority shareholder problems. an expedient bank judicial liquidation process and a legal framework for transfer of assets and liabilities are established. the capital requirements to comply with basel iii guidelines are now mandatory under mexican law. the procedures for applying liquidity requirements are also determined. with respect to competition in the sector, a new law facilitates mortgage substitution by debtors, allowing them to choose banks offering more favorable terms. other measures that work in the same direction include greater facility for the mobility of deposits and consumer loans, meaning that customers can transfer their accounts and loans to other banks with less red tape and shorter delays. importantly, bundled sales of financial products and services are prohibited. these measures will potentially foster a more competitive, consumer - friendly and healthy banking system. along with other reforms, they may contribute to higher potential economic growth. however, as is true with the overall current reform agenda, the effectiveness of these measures will depend heavily on the quality of pending legislation needed to put the changes in place, and adequate implementation. the current economic cycle after a full year of

however, we are seeing an increasing ability to issue corporate obligations beyond one year in local bond markets. the maturity structure ( yield curve ), however, generally does not extend beyond two or three years, and the central problem for both government and corporate borrowers is to push out maturities as far as is possible. equity markets which are organized stock exchanges in emerging economies have been slow to develop because of the traditional reluctance of closely - held firms to divulge information to the public or an unwillingness to dilute voting power and control of the firm. for these reasons, closely - held private placements have historically been more important. another important group of investors in capital markets are institutional money managers. these include insurance companies, mutual funds and pension funds which achieve important economies of scale through pooling small savings, diversifying investments and monitoring market information. institutional investors raise the level of professionalism within markets through requiring better information and increased transparency. financial infrastructure : capital market participants nearly unanimously agree that they should not engage in underwriting, trading or asset management activities in the absence of a secure legal and regulatory environment. foreign investment funds usually cannot go into a market that lacks adequate legislation and oversight. ladies and gentlemen, many organized exchanges operate as self - regulatory organizations ( sros ) that sometimes do not meet internationally recognized norms for transparency and disclosure. although exchanges perform a self - regulatory function, most developed financial systems additionally have a securities exchange commission - type institution that provides an additional layer of oversight. investors look to these organizations to safeguard the markets through establishing minimum standards of capitalization, registration of securities and market participants, timely and material disclosure and effective enforcement. in addition to the legal and regulatory framework, the financial infrastructure should include a non - bank payments system for the organized exchanges. commonly called clearance and settlement within a central securities depository, these clearing houses depend importantly on legislation enabling their establishment and on the clarification of legal concepts such as netting and the treatment of guarantees in bankruptcy for their effective operation. role of financial systems distinguished ladies and gentlemen, in development finance it is recognised that economic development is partially dependent on the financial system to help mediate the transfer of money to areas of the economy that need it most. the financial system has a number of key functions, which help facilitate these shifts in money that are important for sustainable economic growth. the most important of these are : savings ; loans ; investments ; business growth and government expenditure responding to international capital flows distinguished ladies and gentlemen, i would like