loan to deposit ratios. the government ’ s decision on anglo – a bank whose astonishing level of loan losses has been widely aired, and which has damaged the domestic and international reputation of irish banking – comes as a welcome relief. the proposed structure will provide a secure home for anglo ’ s depositors, insulating them from the process of running - off the loan assets over time. the government has asked the central bank to determine the appropriate levels of capital needed in the two institutions into which anglo is being split. there are some technicalities involved, and, while i don ’ t want to anticipate the exact numbers to be published, it may be worth explaining that the type of capital assessment we are doing for anglo is different from those we have already conducted for the other irish banks, due to the nature of the split bank structure, the goal of working out assets and of derisking the balance sheet and the prospect of a change in the regulatory status of the asset recovery entity over time. our analysis of base capital calculations will therefore focus on the amount required to ensure the new structure is capitalized in accordance with current basel capital requirements in light of existing provisions and immediate expected losses. we will also be publishing a stress assessment of the potential future losses taking account of stress funding costs as well. thus, recognizing that losses may exceed the base assessment over time, by setting out a stress case we aim to provide as much certainty as is reasonably possible as to the potential exposure presented by anglo under a severe hypothetical stress scenario in the run off of its book. i ’ m not planning to revisit today details of the overall net fiscal cost of the irish banking crisis. everyone has known for months that the exposure is large, with a wide, though narrowing, range of uncertainty. current work seeks to narrow the range as far as possible, though historical experience cautions against expecting great precision. the anglo base capital and stress calculations will definitely help, and the completion of the nama process will also narrow the range – for example with regard to inbs. much of the exceptional government financial support for bank restructuring arises this year, and followers of budgetary statistics will see a sizable step jump in irish government debt, and a sharp transient spike in government borrowing in 2010. interested market participants are being kept well aware of this, and publication of the exact numbers should not come as a surprise. actually, though, these exceptional financial injections into banks are smaller than the rest of the government deficit in 2009

this component of business costs, would result in a subsequent increase in headline inflation. however, this risk is more evident in emerging countries than in developed ones, where the weight of food products in cpi is lower. in latin america, inflation will remain the dominant theme and the risks on this front will remain skewed to the upside. in argentina the monetary and financial regime has faced the most significant challenge since the crisis of 2001 - 2002, but when we look at the results it is clear that we definitely managed to rise to it. for the first time in decades regardless of external and domestic disruptions, as the ones seen in the last days, the central bank is providing monetary and financial stability, two essential public goods for sustainable development. we know that the country has a long history of macroeconomic instability. monetary regimes have unsuccessfully shifted from one extreme to the other. therefore, in an economy with precedents such as confiscation of deposits ( 1989, 2001 ), hyperinflation ( 1989, 1990 ), megadevaluations ( 1989, 1990, 1991, 2002 ), and a default on the public debt ( 2001 ), the monetary system cannot set itself an exclusive goal, ignoring the economy ’ s idiosyncrasy and vulnerabilities. to achieve long - term monetary and financial stability, this historical evolution needs to be taken into account. hence, the central bank must have an “ across the cycle ” view rather than a short - term one. our country is still going through a transition phase typical of post - crisis periods. and these transition stages – where key macroeconomic variables converge to their long - term values – take time and raise enormous challenges. the chilean case shows that it takes time to become a normal country. unlike the cases of brazil, mexico or southeast asia, the abandonment of the convertibility regime included simultaneously an institutional breakdown, a huge devaluation, the destruction of the financial system and the default on the public debt. there are several examples of the normalization phase that is still taking place : monetary transmission channels are just being rebuilt, since credit to the private sector accounts for only 12 percent of the economy ; far below the latin american average. the experience of other emerging economies shows that consistency and gradualism in both policy design and implementation are the adequate approach during this phase. therefore, patiently rebuilding the power of monetary policy is a key step towards stability. it is then clear that the argentine economy is simply at a different