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it is necessary to continue strengthening the robustness of these methods to evaluate situations of extreme tension. starting tomorrow, the central bank of chile will hold its annual conference, and this version will feature frontier work in this area. from the regulatory standpoint, supervision must consider the macroeconomic impact of financial activity. in the months to come, we will have to analyze also the potential procyclicality of the basel ii capital requirements, as well as the modeling and quantification of liquidity risk. a regulatory framework will be necessary to ensure the building of sufficient reserves in the boom phase of the cycle in order for the financial system to be well capitalized when the bust phase comes. 9 one of the most recurring sources of financial stress in the past few years in emerging economies are periods of euphoria or pessimism, which trigger movements in their exchange rates beyond what their fundamentals would justify. for example, when economic expectations are good, foreign exchange appreciations can arise with symptoms of bubbles in favor of all the domestic assets. as i discussed before, a first line of defense for specific asset prices, stocks or housing is to raise the interest rate. however, in the area of exchange rates this may trigger more pressures to appreciate and exacerbate financial imbalances. a floating exchange rate regime is the most adequate to prevent exchange rate policy from inducing currency these authors find that only half of the accelerated expansions of broad monetary aggregates result in higher inflation, but the probability increases when this coincides with an asset price boom. for an interesting discussion in the context of the present crisis, see borio ( 2008 ). speculation. the fiscal policy can also contribute to reduce foreign exchange pressures. however, these measures may not be enough, and thus in some exceptional periods, and with the purpose of preserving financial stability, an intervention in the foreign exchange market is warranted. 10 in chile, since the floating exchange rate regime was adopted, this has occurred on three occasions, all deemed exceptional. to avoid conflicting goals, consistency between the intervention and the direction of the monetary policy is important, and to that end a first requisite is that the intervention does not have a specific point or range objective for the exchange rate. finally, the current international financial crisis underscores the importance of having an adequate framework for international reserves management, as a key tool to cushion the impact of international liquidity shocks on the economy. the accumulation of reserves in chile that begun in april this year