However, if possible, the speed at which this is done should be kept in line with the capacity of domestic regulators and supervisors to monitor and respond to the potential risks generated by these changes. Concluding remarks Regarding monetary policy, the main challenge of EMEs today is to avoid persistent deviations of inflation from its target, especially in an environment where the price of agricultural commodities and oil have been rising sharply. Changes in relative prices have to take place, but the risk of propagation to other prices has to be mitigated, in particular in economies, like Chile, that are operating close to full capacity. Monetary policy cannot be subordinated to exchange rate objectives, even in cases where measures to alleviate exchange rate appreciation have been adopted. This is the reason why in Chile we implement sterilized intervention in a fully transparent way, with pre-announced magnitudes for foreign exchange purchases. This allows preserving independence of monetary policy to stabilize inflation. Regarding financial stability, I have outlined some issues relevant to EMEs, but there is a need for global cooperation. My opinion is that too much of the recent discussion on capital inflows has been framed from the perspective of recipient countries. Although this view is certainly relevant, it is incomplete. The risks of excessive currency mismatches, overvalued assets, complex products and so on, are also relevant for the institutions making these investments – be they large internationally active banks, defined benefit pension funds or insurance companies.

This entails focusing our sights on the path ahead, towards re-building a global financial architecture that will facilitate and secure our economic prospects. With the considerable benefit of hindsight, we now know that finance, if not anchored to the aim of creating sustainable value in the real economy, will become inherently unstable and destabilising to the ultimate goals of greater shared prosperity. There is thus a compelling need for finance to have a greater role in shaping responsible behaviour that underpins a stable and well-functioning economy, and advances the goals of a progressive society and sustainable environment. This is the underlying objective of responsible finance. Of significance, aligning business practices towards responsible finance entails a paradigm shift away from the conventional thinking of finance - the most important distinction being the need to recognise and appreciate that responsible finance delivers value by focusing on its ultimate outcomes, rather than its immediate returns. Responsible finance at its core strives to serve wider objectives that is consistent with, but goes beyond, the predominant objective of enhancing shareholder value. In delivering long term sustainable value, allocative efficiency is achieved in a manner that promotes stability and prosperity in the broader economy and sustainability of the environment. Above all, responsible finance aims to optimise its positive impact on society, economic wellbeing and development. Over the recent decade, the heightened advocacy for ethical and socially responsible investments has also seen the proliferation of financial instruments that cater for both financial and societal objectives.