greece demonstrated an ability to adapt to changing circumstances, often playing a leading role in providing solutions to the main economic problems of the day. let me use the occasion of the bank ’ s 75th anniversary to elaborate briefly. following a period of monetary instability, in march 1927, the greek government sought the assistance of the league of nations to improve the health of the economy, to secure monetary stability and to help the greek banking system function better. negotiations with the league followed and a stabilisation plan was hammered out. among the terms of the so - called geneva protocol, signed in september 1927, was the establishment of a central bank, exclusively responsible for issuing banknotes. until that time, the national bank of greece, a private institution, had the privilege of issuing banknotes, which it waived in favour of the newly established central bank. the bank of greece commenced its operations in may 1928. the two main tasks assigned to the bank, as specified in its statute, were to ensure a stable currency and to regulate currency circulation. to this end, the statute provided for the bank to have reserve assets ; it also set a strict limit on the financing of budgetary deficits by the central bank. the bank of greece could not have begun operating at a more difficult time. this was a time when the international monetary system was operating primarily under the gold - exchange standard. effectively, the gold standard aimed at securing the stability of a currency by tying money supply to the gold reserves of the central bank, thus leaving little room for conducting an independent monetary policy. the gold standard has been described as nailing the domestic economy to a “ cross of gold ”. today, many historians blame the gold standard for helping precipitate the great depression that began in 1929. regardless, the global stock market crash of 1929 and the ensuing global financial crisis of september 1931 saw many countries driven off the gold standard. the new international environment was hardly a favorable one for a fledging central bank. concerned about the instability that might follow in the absence of the gold standard - and with the recent period of monetary instability entrenched in their memories - the greek authorities attempted to maintain the link to gold. the drachma, however, came under heavy selling pressures, and, in april 1932, greece had to leave the gold standard. leaving the gold standard made monetary policy a matter of the discretionary judgement of the authorities at the bank of greece. the new monetary regime opened up the possibility of the bank playing a more

for release on delivery 9 : 05 a. m. est march 1, 2021 some preliminary financial stability lessons from the covid - 19 shock remarks by lael brainard member board of governors of the federal reserve system at the 2021 annual washington conference institute of international bankers ( via webcast ) march 1, 2021 it has now been one year since the devastating effects of the first wave of the covid - 19 pandemic hit our shores, a year marked by heartbreak and hardship. 1 we look forward to a brighter time ahead, when vaccinations are widespread, the recovery is broad based and inclusive, and the economy fully springs back to life. but we should not miss the opportunity to distill lessons from the covid shock and institute reforms so our system is more resilient and better able to withstand a variety of possible shocks in the future, including those emanating from outside the financial system. the dash for cash investor sentiment shifted dramatically in the early days of march 2020 with the realization that covid would disrupt the entire global economy. short - term funding markets became severely stressed as market participants reacted to the advent of this low - probability catastrophic event. the abrupt repositioning and repricing of portfolios led to a dash for cash, as even relatively safe treasury holdings were liquidated, volatility spiked, and spreads in treasury and offshore dollar funding markets widened sharply. forceful and timely action by the federal reserve and other financial authorities was vital to stabilize markets and restore orderly market functioning. although some parts of the financial system that had undergone significant reform in the wake of the global financial crisis remained resilient, the covid stress test highlighted significant financial vulnerabilities that suggest an agenda for further financial reform. i will briefly comment on these areas of vulnerability as well as areas where earlier reforms led to greater resilience. i am grateful to namirembe mukasa and filip zikes, as well as david bowman, marta chaffee, sally davies, kurt lewis, jennifer lucier, patrick mccabe, travis nesmith, and nancy riley, for their assistance in preparing these remarks. these remarks represent my own views, which do not necessarily represent those of the federal reserve board or the federal open market committee. - 2short - term funding market vulnerabilities the covid shock brought to the fore important vulnerabilities in the systemically important short - term funding markets that had previously surfaced in the global financial