in argentina, the monetary policy transmission channels are only just being rebuilt, since credit to the private sector accounts for 10 percent of the economy, still far below the latin american average. therefore, patiently rebuilding the power of monetary policy tools is a great step towards consolidating growth and stability. meanwhile, monetary and financial policy should be conceived under a general equilibrium approach, where fiscal solvency, the monetary balance and external sustainability are mutually determined. against this backdrop, a sustainable and long - lasting reduction of the inflation rate depends on the comprehensive, joint and coordinated action of the monetary policy, the fiscal policy, the wages policy, and the competition policy. thus, we see that the current regime of control over the money supply and the demand for money combines the necessary doses of monetary prudence ( as shown by sixteen running quarters of compliance with self - imposed monetary aggregate growth targets ) and flexibility ( which has enabled us to weather the recent turbulence ). through this scheme, by trading in the repo market, issuing central bank notes and bill, and collecting in advance the rediscounts granted during the crisis, we eliminated any potential excess money supply. in fact, in the first half of the year we sterilized 80 percent of foreign exchange purchases – up to almost ars 25 billion. and this did not affect the bank ’ s positive balance sheet. the monetary program sets indicative targets for all monetary aggregates. however, the achievement of these targets is linked to the change in the means of payment, since in an economy where financial normalization has not yet been achieved, it would be healthy for savings – time deposits – to be more rapidly channeled back into the financial system. deposit performance has not been affected by financial uncertainty and time deposits keep growing above the average. this is another eloquent example of the strategy developed in the past few years to face contingencies : the recovery of banking liquidity and solvency, which allows us to have a sound financial system today that acts as a “ turbulence buffer. ” in turn, improved profitability, together with capitalizations, strengthen the solvency of the system. just as reserves play the role of liquidity insurance to the monetary authority, banks ’ cash is the first defense line against unexpected events. for this reason, banking regulations fostered the recovery of liquidity, equivalent to almost 40 percent of total deposits, one of soundest of the region. we should not forget about the growing dynamism of banks in getting

mercedes marco del pont : the certainties and uncertainties in the world economy speech by ms mercedes marco del pont, governor of the central bank of argentina, at the money and banking conference 2010, central bank of argentina, buenos aires, 2 september 2010. * * * this 2010 conference is very special to all argentineans because this year is our country ’ s bicentennial and the 75th anniversary of the central bank. we are celebrating this money conference in the framework of a world economy with abundant uncertainties. during the early morning session, the possibility of developed countries entering a final, sustainable and balanced growth phase was discussed. there is also uncertainty as to what is going to happen to the weakest european economies that are implementing the fiscal consolidation and adjustment programs imposed on them to settle their debt issues, which most of us think will probably stress europe ’ s current structural issues. there is also uncertainty in the international financial regulation arena and its new engineering. after the onset of the crisis when rock bottom was hit, there were some signs of a possible exit to the crisis with the emergence of positive indicators in a number of developed economies ; now the most critical positions concerning a substantial reform of the international financial architecture are starting to fade away. the idea of making changes so that everything at the structural level remains the same seems to be consolidating. there are many more uncertainties that could be discussed, but i would rather speak to you today about some certainties we have in developing countries, especially in argentina. we have one clear certainty : for the first time in our short - and long - term history, countries in the region, in general, and argentina, in particular, are going through this global crisis – one of most severe since the great depression – with very low economic and social costs, without having faced a cyclical and structural external sector crisis or been immersed in recession crises leading to job and wealth destruction. in fact, it was quite the opposite : as we faced this crisis, activity levels were preserved, macroeconomic imbalances, avoided and, at the same time, income levels were intended to be distributed, both in argentina and in many countries in the region. this is not by chance. it is the result of our countries ’ consistent economic models, which gave up old conventional theories that furthered our nations ’ underdevelopment, and drove attention back to domestic market growth supported by wage corrections and redistribution policies, where public investment acts as a source of wealth and social inclusion