the financial turbulence seems to be fading into the past, but its effects on output and employment will remain with us for a while. monetary policy will continue to aim at reducing these effects. it has proven to have significant degrees of flexibility, always consistent with reaching the inflation target. while in quiet times a gradualist behavior of monetary policy can be expected, when confronted to extreme conditions like we see today, proactive action is called for, and that is what we have been doing. we know this world crisis cannot last forever, and we are confident in the healthy fundamentals of our economy and in the expansionary capacity of the unprecedented and significant macroeconomic stimulus packages that are now under way. thank you very much. figure 1 countries experiencing drops in real gdp in the fourth quarter of 2008 ( * ) ( percentage of sample ) ( * ) using the annualized quarterly gdp for a sample of 29 developed or emerging economies. source : central bank of chile. figure 2 monetary policy rate ( mpr ) change in mpr mpr level ( basis points ) ( percent ) japan u. s. canada switzerland israel hong kong u. k. sweden eurozone chile czech rep. norway south korea malaysia n. zealand australia poland peru philippines india china colombia mexico indonesia south africa hungary turkey brazil argentina russia iceland chile turkey n. zealand u. k. india norway colombia australia sweden israel south africa south korea eurozone hong kong brazil canada switzerland iceland poland mexico peru china czech rep. indonesia u. s. philippines malaysia japan hungary russia argentina - 800 - 600 - 400 - 200 from 4 sep. 2008 to 8 may 2009 at 8 may 2009 source : bloomberg. figure 3 accumulated cpi variation ( percent ) mexico colombia south africa brazil poland south korea turkey hungary hong kong peru czech rep. sweden indonesia u. k. norway canada thailand eurozone israel switzerland u. s. japan malaysia chile south africa turkey chile indonesia colombia hungary peru brazil czech rep. malaysia israel mexico south korea norway u. s. thailand poland u. k. sweden eurozone switzerland canada hong kong japan - 3 january 2007 - october 2008 - 2 - 1 october 2008 - march / april 2009 ( * ) ( * ) in april for brazil, chile, colombia, indonesia, mexico, peru, south korea, switzerland, thailand and turkey. sources : statistics bureaus of each country and bloomberg. figure 4 incidences on annual cpi inflation ( * ) ( percentage points ) - 2 - 2 - 4 - 4 public utilities ( 7. 96 % ) fresh

intermediated debit and credit cards and savings in financial institutions follows a similar pattern. [ slide 8 ] insurance services contribute to deepen the financial system due to their long - run investment perspective. both life and non - life insurance is far less extended in emerging markets compared to high - income oecd countries. central bank of chile 29 june, 2017 slide 8 insurance companies coverage : international comparison penetration of the insurance industry, 2015 ( direct gross premiums as a percent of gdp ) life non - life lu ie kr us dk uk fr sz jp it se pt de be au no at fi es nl si il cl ca nz ee cz br pl ar sk co is hu lv mx gr pe tr source : oecd. [ slide 9 ] the development of finance in developed countries of course didn ’ t prevent them from getting into a big crisis a decade ago. but if you think that was big you should consider crises in developing countries, like the debt crisis of the early 1980s, the tequila crisis of 1994 or the economic and political crisis in argentina in 2001. [ slides 11 and 12 ] they devastated the entire financial system of those countries, evaporated or froze deposits, brought countries into deep recessions and massive unemployment and were only resolved after massive bailouts and debt write offs. slide 9 financial crises in emerging countries 25 worst financial crises in history ranking year country 1926 chile 1983 peru 1931 uruguay 1929 mexico 1890 brazil 1890 uruguay 1929 / 1933 us 1980 / 1985 argentina 1994 venezuela 2008 greece 1931 / 1934 argentina 1981 mexico 2001 argentina 1980 chile 2002 uruguay % change peak to trough - 46. 6 - 32. 0 - 36. 1 - 31. 1 - 21. 7 - 21. 0 - 28. 6 - 21. 8 5. 3 - 24. 0 - 19. 4 - 14. 1 - 20. 9 - 18. 9 - 18. 9 number of years peak to peak to severity trough recovery index 62. 6 57. 0 53. 1 47. 1 42. 7 40. 0 38. 6 39. 8 8. 7 36. 0 34. 4 31. 1 28. 9 26. 9 26. 9 sources : reinhart, c. and k. rogoff ( 2014 ), “ recovery from financial crises : evidence from 100 episodes, ” working paper 19823, nber. central bank of chile 29 june, 2017 financial distortions that influence macro stabilization slide 10 ▪ liquidity constraints prevent relative prices from helping macro