certain extent, similarities to those that affected latin america in the past : a stop in bis central bankers ’ speeches foreign capitals inflows, which induced severe financial stress and real adjustment. but also differences, due to the fact that this reduction of capital flows took place in a highly integrated monetary union, with its own peculiar adjustment mechanisms, leading to the segmentation of the euro area capital markets. these peculiarities also contribute to explain the huge magnitude and depth of the crisis. the scale of the imbalances and adjustments surpasses those in latin american past experience. correspondingly, the challenges that individual countries and the area as a whole are facing are daunting. indeed, the policy response to the crisis – both at the national level and at the level of the eu and the euro area authorities – has been substantial, particularly in the structural and institutional dimensions. the euro area authorities have realised that, in parallel to the management of the crisis, a reshuffling of the european governance and a strengthening of the institutional framework are necessary for the long term sustainability of emu. but, the slow process of decision making in europe, the difficulties of policy implementation and the debate around the burden - sharing of the crisis have limited the positive effects of those policies on confidence and credibility. in this setting, the ecb and the eurosystem have played a central role. while safeguarding their paramount objective of price stability, their actions have been directed to re - establish the proper functioning of the transmission mechanism of monetary policy, as shown by the recent decisions by the governing council on the o [ utright ] m [ onetary ] t [ ransactions ] initiative. some big steps have been taken on the institutional front at the european level. fiscal rules have been strengthened and refined, governance reinforced and, in the financial sphere, great progress is being made to establish a common supervisory framework. in parallel, national constitutions have been adapted in several countries – germany, spain and others – to comply with these new requirements. this overview of the problems and challenges in europe may be compared with the evolution of latin america during the crisis and its aftermath. the latin american performance during the crisis shows that these countries have drawn the lessons from the similar episodes they went through in the late nineties and early 2000 ’ s. in particular, i would highlight two characteristics of the economic setting that has made the region so resilient to the external shock this time : the improved macroeconomic framework – underpin

charles i plosser : communicating a systematic monetary policy speech by mr charles i plosser, president and chief executive officer of the federal reserve bank of philadelphia, to the society of american business editors and writers fall conference, city university of new york ( cuny ) graduate school of journalism, new york, 10 october 2014. * * * the views expressed are my own and not necessarily those of the federal reserve system or the fomc. highlights • president plosser discusses how effective communications and a systematic, rulelike monetary policy lead to better economic outcomes. • president plosser believes the appropriate way to make policy systematic, or rulelike, is to base policy decisions on economic conditions. he thinks policymakers should describe the reaction function that determines how the current and future policy rates will be set depending on economic data. monetary policy should be data dependent, not date dependent. • president plosser also believes the fed should think of forward guidance as part of a systematic approach to decision - making and not an independent policy tool that attempts to bend expectations. as monetary policy becomes normalized, the fed has the opportunity to ensure the public understands that forward guidance is an integrated part of a systematic approach to policy. introduction thank you. as you may know, this is the centennial year for the federal reserve. on december 23, 1913, president woodrow wilson signed into law the act that created the federal reserve system, and on november 16, 1914, the 12 reserve banks officially opened their doors as independently chartered banks. oversight was assigned to a board of governors in washington, d. c. that decentralized structure is one of our great strengths, but it requires that i begin by reminding you that the views i express this morning are my own and do not necessarily reflect those of the federal reserve system or my colleagues on the federal open market committee ( fomc ). since this is a professional society of business editors and writers, i thought i would discuss the benefits of clear communications as part of a systematic, rule - like approach to setting monetary policy. during the past eight years, i have spoken and written frequently about ways to improve the framework we use for making monetary policy decisions. in my view, the monetary policy framework is most effective when the central bank : • commits to a set of clearly articulated objectives that can be feasibly achieved by monetary policy ; • conducts monetary policy in a systematic or rule - like manner ; • communicates its policies and actions to the public in