In poor and vulnerable countries where financial development is weak and sovereign indebtedness with the banking sector is predominant, the feedback effects between the deterioration in public accounts and rising debt, on the one hand, and liquidity, or even solvency of the banking system on the other, also foster the propagation and amplification of shocks. The current terms of trade shock thus highlights the excessive dependence of vulnerable and poor countries on commodities. 2. How to mitigate terms of trade shocks? On this subject, it seems essential to distinguish two types of objectives: the objectives of economic and financial stabilisation on the one hand, and the objectives of prevention and better resilience to terms of trade shocks on the other. As regards economic and financial stabilisation, macroeconomic policies, in particular fiscal policies, play a central role in this field. Of course, in order for these to be implemented, it is necessary to have sufficient countercyclical room for manoeuvre. Consideration should also be given to how fiscal consolidation policies can preserve investment priorities for sustainable development, based on the development of infrastructure and human capital (health, education). The effects of fiscal consolidation can thus be mitigated by changes in the composition of government revenue and expenditures, more favourable to long term growth. As regards the exchange rate, the optimal policies to be put in place in developing countries facing exogenous shocks are the subject of debate.
Countries such as Australia, Hong Kong, the UAE, the UK, Singapore, and Malaysia have issued discussion papers, introducing a sandbox approach which allows fintech solutions to be tested in a controlled environment, with appropriate risk mitigation in place. BIS central bankers’ speeches  3  Dedicated resources have been allocated to collaborate with private sector innovators and assess the feasibility of technology. Jointly, these efforts serve to build public-private consensus on how to deploy financial technology, by: a.  Conveying national-level support for fintech innovations that place the customer firmly at the centre;  b. Providing clarity to the public on the applicability of regulations to fintech solutions; and  c.  Supporting regulators and supervisors in understanding technologies function, as well as the benefits and risks. how  underlying  Third, it is important to address the role of Governments in national financial inclusion strategies. This is particularly relevant in encouraging e-payments as a key lever to expand the outreach of formal financial services. A clear commitment by Governments can secure the political capital needed to create the infrastructure and policies to accelerate financial inclusion such as unique identifiers and mandatory electronic G2P payments. Policymakers should also seek opportunities to promote the interoperability of supporting infrastructure for new financial innovations. This will preserve healthy competition and strong incentives for providers to continue innovating value-add solutions that meet the real needs of consumers.