, in particular, have shaped the pandemic ’ s impact. 5 for instance, some economies have strong trade links with china ( e. g. chile and peru ) or the united states ( mexico ) ; their recovery in external demand therefore differs as a result of the distinct recovery trajectories followed by those global economies. exports of transport and tourism services, two of the sectors hardest hit by the health situation, account for a notably large share of the region ’ s trade ( 13 % in the case of tourism ). furthermore, the price dynamics of commodities, which make up a considerable portion of exports, are influencing the recovery in some countries. economic policy support has been crucial in mitigating the impact of the health crisis. the authorities very swiftly and forcefully adopted highly expansionary fiscal and monetary policies thanks to the institutional credibility gains made in recent decades. for instance, the governments of brazil, chile, colombia and peru introduced fiscal measures aligned with those adopted by the advanced economies. these mainly consisted of extraordinary budgetary items to reinforce their health systems and provide liquidity support to households and firms, including guarantees, loan servicing payment deferrals, capital injections, additional public spending and forgone revenue, including temporary tax cuts. turning to monetary policy, nearly all of the region's central banks have cut interest rates to record lows. further, they have provided liquidity in local currency and in dollars, conducted banking interventions and some of them have even established asset purchase programmes, 6 which have reduced the volatility in longer - term interest rates and in exchange rates. for a description of the pandemic transmission channels in the region, see banco de espana ( 2020 ), “ report on the latin american economy. second half of 2020 ”, analytical articles, economic bulletin, 4 / 2020. for a description of the asset purchase programmes run by central banks in emerging economies, see banco de espana ( 2020 ), “ asset purchase programmes of latin american central banks ”, box 1, “ report on the latin american economy. second half of 2020 ”, analytical articles, economic bulletin, 4 / 2020. likewise, the corresponding economic authorities adopted a set of macroprudential and supervisory measures to foster the flow of credit, provide liquidity to the banking system and mitigate the adverse impact of the crisis on financial institutions ’ capital. 7 all of these measures have helped to ensure that the main indicators of the most important latin american banking systems for spanish banks have

fuel the negative effects on the capacity for recovery and medium - term economic growth. in this context, fiscal policy may be particularly effective in preventing these potential vicious circles by supporting non - financial corporations. this support would alleviate problems of over - indebtedness for firms considered to be viable, thus helping them to survive. it would also enable investment and employment to be more expansionary during the recovery. moreover, this support would avoid a potentially significant deterioration in the banking sector ’ s financial position, which would otherwise add a further financial element to this crisis, possibly making it much more persistent, as we saw in the previous global financial crisis. thus, by lending to households and firms, the banking sector could, help reactivate the economy when the pandemic is over. this will surely require a smoothly functioning credit channel, of such importance in european economies. the european central bank ’ s strategy review in this third part of my address i will take a longer - term perspective and reflect on the changes that are occurring in the conduct of monetary policy in the advanced economies, which have prompted the ecb, like other central banks, to review its strategy. in the years leading up to the 2007 - 2012 crisis, which in our case coincided with the initial years of the ecb ’ s existence, a broad consensus took hold in the advanced economies regarding the role and functioning of central banks. specifically, according to this view, the monetary authorities should act as independent entities, not directly controlled by governments, with a clear mandate to promote price stability and, in some jurisdictions, such as the united states, full employment. the price stability mandate is normally expressed as a numerical inflation target, frequently 2 % or, as in the case of the ecb, a rate below, but close to, 2 %. to achieve its price stability target, the central bank adjusts the general level of interest rates on the funding raised – via bank loans or in the debt markets – by agents in the real economy ( businesses, households and governments ). although the central bank controls the nominal interest rate, it is the “ real ” interest rate – that is, the nominal rate less expected inflation – that is relevant for households ’ and businesses ’ spending decisions. for instance, a nominal interest rate of 2 % when expected inflation is 4 % is much more expansionary than a nominal interest rate of 1 % in a noninflationary setting. given that the prices that determine inflation are partly rigid, the central bank