cleaning - up of highly speculative positions. mexico ’ s relative resilience to external shocks seems to be based on a solid economic foundation, including prudent fiscal management, monetary policy focused on controlling inflation, and a sound regulatory and supervisory framework for financial institutions. additionally, a broad reform agenda may be contributing to a positive perception of the economy. nevertheless, recent financial developments are no guarantee of future tranquility. the challenges ahead are faced by other emerging markets as well. mexico can further differentiate itself through commitment to an announced multiyear reduction of public debt, the convergence of inflation to the permanent target, and a profound implementation of ongoing structural reforms. these measures should foster financial stability and long - term economic growth. concluding remarks the likely divergent monetary paths of advanced nations pose challenges for emerging economies. the proximity of the liftoff of rate hikes in the united states is encouraging, as it will reflect a strong economic performance that should favor the world recovery. the intended gradualism by the fed, and the possible continuation of monetary expansion by the european central bank and the bank of japan, may suggest that the global economy will still see abundant liquidity, with relatively benign financial conditions for emerging markets. however, uncertainty surrounding the pace of u. s. normalization and of monetary actions in other countries may give rise to episodes of international financial volatility. in particular, market sentiment towards emerging economies could change. the best strategy for countries to shield themselves against external shocks is to strengthen economic fundamentals, while at the same time authorities remain on alert for factors that would put financial stability at risk. finally, mexico can potentially remain attractive to investors by assuring public debt sustainability, consolidating convergence of inflation to the target, and implementing ongoing structural reforms in a deep - seated, effective manner. bis central bankers ’ speeches

monetary fund ( 2014 ) : “ 2014 triennial surveillance review — overview paper ”, imf policy paper, july ; blanchard, olivier ( 2017 ) : “ currency wars, coordination, and capital controls ”, international journal of central banking 13 ( 2 ) : 283 - 308, june ; and rogoff, kenneth ( 2013 ) : “ comment on ‘ international policy coordination : present, past and future ’ by john b taylor ”, in bis working paper no. 437, december. potential for contradictory conclusions from the studies carried out by official sources from the involved countries. • we need a strong, efficient and adequately funded global financial safety net. although it can be argued that the latter has already strengthened due to individual country efforts, particularly in the emerging markets, to accumulate international reserves, relying exclusively on this strategy would be costly, inefficient and potentially distortionary. 9 a more balanced approach towards the enhancement of the global financial safety net should consider a number of additional actions. first, the international monetary fund must consolidate its position as the central element of the global financial safety net, through the increased availability of own resources, which it should be better able to mobilize via more and improved lending facilities for its membership. secondly, as demonstrated by the experience during the early stages of the global financial crisis, world liquidity provision may be efficiently expedited by the availability of bilateral swap lines between central banks. 10 lastly, more work should be done to enhance the role of regional financial arrangements ( rfas ), including through better coordination with the imf. 11 in addition to the country - borne financial costs of the needed sterilization operations, possibly amplified by the uncertainty regarding their optimal level and the consequent over - stocking, international reserve accumulation may have important effects abroad, including the exacerbation of global current account imbalances, downward pressures on international interest rates, distortions in the valuation of assets, and investor strategies emphasizing a search for yield. reserve currency issuers, in particular, remain reluctant even to restore the network of swap lines introduced in the context of the crisis, due mainly to concerns regarding the increased moral hazard it may generate among emerging market economies, in addition to other risks that are not easily dealt with through the use of collateral. of course, rfas face many other challenges, such as unequal access across countries, limited availability of resources, rigid criteria for financial support and uncertainty due to the lack of relevant evidence regarding their