In Latin America, the challenge is to take the necessary policy measures in order to avoid that this exogenous volatility turns into domestic or endogenous risks. Food price rises can potentially lead to wage demands which, given the stickiness of this component of business costs, would result in a subsequent increase in headline inflation.
Exactly. It is a huge challenge. But it also represents a great opportunity. If we do it properly, we will be able to influence the health of the banking system and enforce adjustments. This has happened much too slowly thus far. So, first of all you plan to review the quality of banks’ balance sheets.