a policy approach that consists in the early adoption of prudential and countercyclical measures to reduce the vulnerability of the economy in the face of a changing scenario. the risk management approach to monetary policy seeks to prevent disruptions in the money and financial market from spreading to the rest of the economy and affecting macroeconomic sustainability. under this scheme, we take into account scenarios that traditionally involve high likelihood of having adverse effects. this entails the development of action guidelines in case such scenarios come true. at the same time, it entails preventive action to reduce their likelihood or minimize their potential impact on the economy. in our country, the strategy jells due to the consistency and validity of its three main pillars : ( 1 ) a robust monetary policy that ensures the equilibrium between supply and demand in the money market ; ( 2 ) a countercyclical scheme to mitigate vulnerabilities and reduce macroeconomic volatility ; and ( 3 ) a managed float. the trend evidenced by the means of payment in 2008 reflects our prudence. and so do financial regulations, which aim to prevent the growth of credit from being hampered and jeopardizing the sustainability of the system. this balanced trend of the means of payment was observed against a framework of multicausal inflation that requires coordinated action by the economic policy and its different areas – fiscal policy, wages policy, income policy and monetary policy. in a context of international commodity prices falling, performance in 2008 confirms the effects of this joint action. bearing in mind the stage that argentine economy currently undergoes and the instruments available, overemphasizing only one policy would be a proof of short - sightedness. especially in a phase where we are still lacking many tools that are typical in more developed economies. for instance, monetary policy transmission channels are only just being rebuilt, since credit to the private sector accounts for only 12 percent of the economy, still far below the latin american average. there are many examples in argentine history of monetary regimes unsuccessfully shifting from one extreme to the other given it inconsistencies. the relatively stable periods were short due to contradictions in the programs that should have ensured macroeconomic solvency. suffice it to recall the end of price stability in the 1990s, after a sharp appreciation of the domestic currency resulting from an exchange rate that was inconsistent with the fiscal position and external equilibrium. among the preventive measures, the reserve accumulation and management policy acts as an insurance against temporary changes in external financial conditions

to adjust their business models to the environment. banks should not use monetary policy as an excuse not to make the necessary effort to change their business models and become more profitable. the central bank of central banks, the bank for international settlements ( bis ), also warns that central bankers are repeating the mistakes of the start of this century when loose monetary policy contributed to a credit and housing boom which then collapsed and gave rise to the financial crisis. 5 / 6 bis central bankers'speeches it ’ s the bis ’ s duty to issue warnings, and we take its advice seriously. today, we monitor risks in the financial system in much more detail than before the crisis, as shown for example by our biannual financial stability review. second, we now have new tools under european law – particularly macroprudential instruments. and third, banks are much less leveraged today, thanks to the new regulatory constraints. history teaches us that, always and everywhere, asset price bubbles were accompanied by high leverage. that is not the case now, because banks ’ balance sheets are smaller. that reduces the amount of risk in the financial system. where we need to be particularly vigilant is with regard to market - based finance, also known as shadow banking. we need to gather the right information and we may need new instruments to make sure that the next big crisis does not come from the shadow banking system. 6 / 6 bis central bankers'speeches