have nonetheless moved forward in putting in place a risk - based supervisory approach where minimum prudential standards are set, behavior and conduct are monitored but the day - to - day strategic & operational decisions are clearly vested on the banks in the context of their fiduciary responsibilities and their governance mandate as good corporate players. we have earlier shown the committee mr. chairman the capital adequacy position of our universal & commercial banks, setting the bar higher than the basel accord. over and above that, we now have a core of dedicated specialists who are individually assigned to oversee specific institutions and have the technical expertise & training required for this critical function. we are instituting a new reportorial system – the frp – that is fully compliant with international accounting standards. perhaps most critically, we have regular and open discussions with our stakeholders so that issues can be thoroughly ventilated and a common understanding reached. the broad overlying issues all of these developments on the ground eventually mesh with the broad overlying issues. we have strengthened ourselves internally because we recognize that funding markets are irrevocably global where ups and downs necessarily cascade to everyone. the market no longer distinguishes where perturbations emanate ; it only appreciates how the contagion may be transmitted. in this respect, the current problems in the united states are certainly not an isolated “ us issue ”. there is no other stronger proof of this than the fact that various central banks have been working in concert to provide the necessary liquidity to prevent systemic dislocations. moving forward though, information will always remain to be the key ingredient so that appropriate measures can be calibrated for differentiated difficulties. information though is a two - way street : we will continue to oversee covered - institutions based on our risk - based supervisory framework while stakeholders need to remain faithful to the tenets of transparency and disclosure. macro - economic landscape we would like to reiterate that the country ’ s macro fundamentals remain sound and the economy has proven to be resilient. despite a general slowdown worldwide and skyrocketing oil prices, we continue to generate growth. our inflation numbers have indeed moved upwards and we recognize the difficulties that this brings. however, based on present commodity market conditions, we may soon see some relief. our international reserves continue to rise, reaching $ 36. 7 billion as of end - august. this represents 6 months worth of imports and the payments of goods and services, doubling our previous norm

and domestic absorption in particular has been possible thanks to mexico ’ s macroeconomic fundamentals, including contained public debt with rising maturities, moderate inflation rates, and a well - capitalized, provisioned and liquid banking system. indeed, the stable macroeconomic environment has enabled bank lending to firms and households to support dynamic domestic investment and consumption. in the upswing, a positive feedback loop has emerged between labor market developments and consumer spending. formal employment has continuously expanded, as measured by average annual gdp growth was 2. 3 percent from 2001 to 2007, and 4. 6 percent from 2010 to the first half of 2012. bis central bankers ’ speeches the number of affiliates at the mexican social security institute ( imss ). although still moderately higher than pre - crisis levels, the total unemployment rate has been gradually declining. this advancement has occurred while labor force participation has recently expanded, the duration of unemployment has fallen, and transitional indicators of employment and unemployment have improved. as a result, the total wage bill has posted real annual growth during the last three quarters. a third characteristic of the current upturn, which may explain cyclical developments more than any other factor, is the extraordinary support provided by external conditions, particularly that from advanced countries. on the surface this may sound contradictory, considering the significant difficulties these nations have faced in resolving the fiscal and financial problems that gave rise to or resulted from the global crisis. after all, prolonged uncertainty regarding the effectiveness of corrective measures in those countries has long put a downward bias on output forecasts for many emerging economies, including mexico, given its close production ties with the united states. yet, in spite of this uncertainty and the relatively weak rebound of the u. s. economy, mexico ’ s actual economic growth has been higher than expected, to a large extent, due to two external factors : solid demand for mexican exports, and unusually favorable financing conditions. 2 obviously, these factors are not independent from the economic policies implemented by developed countries. let me now examine them in more detail. external supporting factors along with the world economy, mexico is currently in its 13th quarter of economic expansion. because of mexico ’ s large degree of openness, the revival of world trade has translated into a significant impetus for mexican economic activity. specifically, non - oil exports, which represent approximately 85 percent of the country ’ s total merchandise shipments abroad, have been increasing at double - digit annual rates in dollar terms. especially vigorous has been the advance of automotive exports, the largest non