and financing. the unavoidable remedial measures in the short term can deepen the impact of the crisis over economic activity, unemployment and poverty, but these costs tend to be much higher if the adjustment measures are postponed or adopted only partially. precisely because of the huge costs involved it is necessary for all advanced economies to devote themselves immediately to resolve the crisis and lay solid foundations to prevent new crises from taking place. this attitude has been crucial for countries like mexico in the past. having laid the foundations during the last 15 years for macroeconomic stability is what has allowed us to grow in today´s turbulent times, despite the magnitude and intensity of the external shocks that we have faced. mexico and other latin american countries not only overcame that stage of great economic and financial vulnerability during the seventies, eighties and part of the nineties, but also focused on creating institutional arrangements capable of preventing and avoiding the reemergence of those crises. every financial crisis is particularly different ; however, there are certain stylized facts inherent in all of them that can help us identify some elements that could be extremely useful in the resolution process. allow me to present to you the stylized facts drawn from the latin american experience, that i think could represent guidelines for solving the current crisis in europe. stylized facts of the resolution of financial crises first, during financial crises, expectations must be stabilized as soon as possible. in other words : the immediate goal should be to move from a vicious to a virtuous cycle in expectations. for example : buying now medium - term debt of a country in crisis at spreads of 450 basis points can be very unattractive, but it could be quite the opposite if the destabilizing expectations disappear rapidly, thereby inducing significant reductions in interest rates. lower interest rates stimulates gdp growth, which in turn facilitates the stabilization process by increasing tax collection and payment capacity of debtors, and consequently reducing the bis central bankers ’ speeches social and political costs inherent to the adjustment. by improving the fundamentals of the economy, expectations keep improving, thus strengthening the virtuous circle. second, in order to adjust expectations the necessary measures must be adopted in a credible way. the perception of markets and society must be that the effort is not only serious but that it will be enough to reverse the situation. in order to achieve this it is essential to : rely on an intellectually honest diagnosis. respond quickly and decisively. be aware – and know how to convey this conviction to society – that the

terminal rate by the end of this year, with independence from the actions that the federal reserve might take in the future. going back to the strength of the mexican peso, this also might be the result of new foreign direct investment associated with the increased attractiveness of the country due to the phenomenon defined as nearshoring or reshoring. indeed, a re - globalization process is underway in which firms now seek to diversify the risk of supply disruptions. thus, the geographical location and the historical context of firm's providers has become relevant once again. mexico has a privileged position to reap the benefits of reglobalization given its geographic location and the trade agreements reached with the united states, canada, and other regions and countries. in that sense, mexico could aspire to become a new global economic hub through the relocation process of different industries. however, in order to ensure the largest possible gains from this process, mexico must undertake specific policies that include increasing public infrastructure investments, reducing insecurity levels, sending clear signals of respect to trade agreements, providing access to key production inputs, and reducing corruption, among others. 2 / 4 bis - central bankers'speeches let me now go back to the specific topics of this year's edition of the conference and briefly describe the papers that will be presented in these seven sessions : first, enrique mendoza and vincenzo quadrini's paper addresses a potential mechanism behind the observed decline in global interest rates. it suggests that the low levels measured for the long - term neutral interest rate ( r * ) are a temporary result of high rate of growth in emerging economies jointly with a change in their financial structure, thus predicting that r * may become higher in the future as this mechanism runs its course. such research may be useful in generating potential scenarios for future global interest rate levels. jonathan eaton's paper provides a new analytical baseline to consider product quality as an additional margin for exporting firms to adjust. it allows economists to approach the changing composition of countries'exports in response to various shocks and may help understand longer term impacts of the usmca on the north american economies. the paper by fabrizio perri analyzes the change in the us net asset position, which was already negative in the 90's and early 2000's, but has become significantly more negative since the global financial crisis. this paper may provide a different perspective on the flows of capital around the globe and on the impact of the recent decline in asset values on