remarks by alejandro diaz de leon, governor of banco de mexico, at the 13th annual conference by the central reserve bank of peru, the re - inventing bretton woods committee, and the interamerican development bank “ the next global financial cycle in a divergent global economy, panel : central banking in a new era? ” july 23, 2021 introduction • first, let me thank the organizers of today ’ s conference. it is an honor to share this panel with my colleagues. • to address today ’ s panel “ central banking in a new era? ” i will make some remarks on four topics : i ) monetary policy ; ii ) financial stability ; iii ) payment systems, and iv ) climate change. challenges for monetary policy • regarding monetary policy, central banks in emerging economies face a more complex set of trade - offs than their counterparts in advanced economies. • in small, open economies, which supplement domestic savings with external financial resources, it is essential to preserve a sound policy mix to foster an orderly adjustment of the economy to adverse shocks and to attract capital inflows. • in these economies, external and idiosyncratic shocks not only affect the demand side, but also the supply side and financial markets, which tends to increase policy trade - offs. • in advanced economies, in the last decades, several structural factors and demographic trends have induced lower potential gdp growth, lower inflation, and a lower real neutral interest rate. • this has resulted in a sustained trend of low - and below - target inflation for long periods of time. this allows advanced economies ’ central banks to be extremely patient in the wake of higher inflation. • emerging markets are not in the same position. we have less policy space, price formation has not been dominated by chronically low inflation, and inflation expectations have not been persistently below target. we need to be mindful of a more flexible and agile price formation process. • in addition, as we have been recently reminded, emerging market economies continue to be exposed to different types of adverse idiosyncratic factors that limit investment, growth, and hamper development. • furthermore, the complex post - pandemic environment poses significant challenges : 1. the global economy is highly heterogeneous and in uncharted territory. 2. fiscal support, mainly in the us, is currently at unprecedented levels, helping the recovery but adding inflationary pressures. 3. post pandemic price and wage dynamics are highly uncertain. 4. recent changes in

manuel sanchez : emerging markets amid heightened uncertainty remarks by mr manuel sanchez, deputy governor of the bank of mexico, at the credit agricole central bank seminar, rome, 23 october 2014. * * * i am honored to join you here today in the magnificent city of rome, a cradle of western civilization, one of europe ’ s great cultural centers, and a muse for poets and artists throughout the centuries. thank you for the invitation to share a few words with you on the topic of emerging markets. emerging economies now confront a new reality, one in which some apparent certainties have disappeared, and different challenges have arisen. i would like to touch on three subjects in this context, starting with the performance of emerging economies, moving on to financial market conditions, and concluding with a brief overview of mexico in particular. as always, my views are entirely my own and do not necessarily reflect those of the bank of mexico or its governing board. developments and the outlook for emerging economies two distinctive trends characterize developments in emerging economies during the last few years. the first is higher growth since the beginning of this century, relative to the previous decade. economic expansion has surpassed that of developed nations substantially, with china and india playing prominent roles. what forces have driven this phenomenon? although emerging economies are not all alike, as a group they seem to have benefited from generally sound policies implemented in the 1980s and 1990s. these include the strengthening of macroeconomic and financial frameworks and the liberalization of markets, reduced regulations, and greater openness to international trade. additionally, high and rising commodity prices and ample access to external credit during the 2000s have helped. by and large, better policy and institutional settings seem to be responsible for the fact that emerging economies were relatively resilient to the shocks of the great recession. indeed, in 2009, while the advanced economies contracted more than 3 percent, the emerging economies grew slightly above 1 percent. 1 nonetheless, since 2011, growth in emerging economies has been declining, the second notable trend for the group as a whole. although still above that of advanced nations, average output change in the last four years has been less than that observed prior to the crisis in this century. several factors may contribute toward an explanation of the slowdown. one possibility is structural. some emerging economies such as china may be reaching the production frontier derived from their reforms. they cannot grow at constant extraordinarily high rates indefinitely. another possibility, which could be complementary to the first, is that