Javier Guzmán Calafell: Policy dialogue - global finance exploration

Remarks by Mr Javier Guzmán Calafell, Deputy Governor of the Bank of Mexico, at the "Policy Dialogue - Global Finance Exploration", during the International Finance Forum 2018 Annual Conference "New globalisation: a path to the future", Guangzhou, China, 24 November 2018.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
27 November 2018

Let me start by expressing my appreciation to the organizers for the opportunity to participate in this 2018 edition of the IFF Annual Conference. Following a period of strong inflows in 2017 and early 2018, nonresident portfolio capital flows to emerging market economies (EMEs) started to reverse in late-April this year, with bond and equity fund withdrawals accumulating to date about US$28 billion. This has responded to a spike in risk aversion, reflected in a series of waves of uncertainty over the year in response to a combination of developments. The latter include upward-trending interest rates in the US, a surge in trade-related tensions, geopolitical developments, a deceleration of the Chinese economy, the decline in key stock markets, heightened political and policy uncertainty in a number of EMEs, as well as sharp declines in oil prices to levels not seen in about a year, among others. As a result, financial conditions in these economies have shown a significant tightening which, according to some estimates, is comparable to that experienced during the taper tantrum episode of 2013.