Finally, the aforementioned improvements in EMEs are likely to constrain the deterioration in business and consumer expectations. This is also a crucial development as the lessons learned from the past financial turmoils and crises revealed that the most distinguishing feature of an emerging market economy is the significant adverse effects on the real economy through the expectations channel. Among many advances in EMEs, rich policy frameworks have played an important role in improving economic agents’ confidence in EMEs. In addition, EMEs ability and policy conduct to accumulate policy spaces have made significant contributions to solidifying gains in confidence. It is worth noting that in addition to conventional macroeconomic policies EMEs have also extensively used macro- and micro-prudential policies, serving as buffers for shocks (Figure 8). Since the EM financial crises EMEs have continued to use a number of macro-prudential measures when conventional policies, such as rate hikes to manage aggregate demand, were realized to be ineffective and/or insufficient. Such macro-prudential tools have not only maintained low levels of leverage but also accumulated buffers that can serve as policy spaces in cases of economic downturn. Additionally, macro-prudential policy helped monetary authorities implement monetary policy exclusively to achieve price stability. Finally, EMEs learned macro-prudential policy is more appropriate to limit and repair maturity and currency mismatch problems. In addition to the macro-prudential policy, EMEs implemented rigorously micro-prudential policies rigorously in order to make their financial firms, especially banks, more resilient and safer against financial stresses.
François Villeroy de Galhau: France and Germany facing European challenges in the crisis Speech by Mr François Villeroy de Galhau, Governor of the Bank of France, at the Bundesbank conference “Banking and Payments in the digital world”, Berlin, 11 September 2020. * * * Ladies and Gentlemen,  1. To this day, the coexistence and complementarity of central bank and commercial bank money as settlement assets has structured the payment landscape and preserved the stability of the monetary system. Yet this structure is increasingly being questioned. • Our payment landscape is based on the coexistence and complementarities of central bank money and commercial bank money as settlement assets. Their respective roles are clearly assigned: central bank money ensures the stability of the financial system while the multiplicity of issuers of commercial bank money preserves competition and innovation in the provision of financial services. Their interplay and their interchangeability at par value ensures the safety and efficiency of the financial system. • However, the balance between these two forms of money cannot be fixed once for all, as it depends on changes in payment habits, the evolution of the financial ecosystem and the emergence of new technologies. • In the retail space, the digitalisation of the economy and the development of cheap, highly effective digital payment solutions displaying innovative features (e.g.