an orderly retreat which inevitably relies on increasing discount rates at which future income streams are priced. this is particular true if some projects were only funded to begin with due to the exceptionally low interest rate environment, and / or if such investments were intermediated by fund managers who care not only about income streams, but also ( and mostly ) about short - term price fluctuations. here we will have an interesting discussion including papers by stephen morris, michael woodford, and gustavo suarez, which will enlighten us about the theoretical aspects to keep in mind when evaluating the broader consequences of asset purchase programs, as well as the empirical evidence regarding the effects of the risk - taking channel on the quality of loans originated. but this is not only a conference about monetary policy in developed economies. indeed, securities from emerging markets fit naturally into the category of riskier assets that are expected to be affected by investors ’ search for yield in an environment of low interest rates, as has been documented by a growing and exciting empirical literature. this will be the topic bis central bankers ’ speeches of the third and final session of the conference, and will include presentations by helene rey, simon gilchrist, and elias albagli. this topic is of particular concern for central bankers and policymakers in latam and other emerging regions, which have good reasons to be worried with the consequences of us monetary normalization in an environment where further exchange rate pass - through will put increasing pressure on our inflation targets, while at the same time interest rate pass - through puts increased pressure on subpar levels of growth. before giving an official start to our nineteenth annual conference, let me end by stressing a related but perhaps less appreciated aspect by which the events of the last few years have changed, i believe in both a fundamental and desirable manner, the way monetary policy is handled and communicated. and if you permit me, i will illustrate the point using the recent chilean experience. in chile, although economic conditions have been far less complex than in developed countries, we have also experimented with unconventional policies... and frankly, i think the experience has been successful. first, in response to the global financial crisis of 2008 the bank increased the supply of liquidity in pesos and dollars – through repos and swaps –, augmented the extensions of the swap program, and broadened the range of eligible collaterals. they were all measures designed to align market rates with the monetary policy rate and to mitigate foreign currency liquidity tensions. forward guidance was also

b ) liquidity ; and c ) rating agencies. accounting methods and valuation at the onset of the financial turbulences, there were strong concerns on how precise was the information reported by banks, how large were the losses, and who was bearing these losses. this uncertainty was a critical factor in the shutdown of key financial markets. the international accounting standards board ( iasb ) and the financial stability board ( fsb ) have been working and promoting recommendations on accounting and disclosure standards for off - balance - sheet investment vehicles, and fair value methods, among others. however, these “ information ” requirements by themselves are not enough, and other measures could be necessary, such as forcing originators and other agents to hold part of the risk of the assets created. liquidity the current financial turbulence has highlighted that for the banking sector liquidity considerations are as relevant as solvency issues. in spite of this, most of the attention in banking regulation has been focused on solvency ( rochet, 2008 ). however, some steps have been taken in this direction by the bis in terms of contingent liquidity demand and related triggers associated with off - balance - sheet positions ( bis, 2008 ). the literature has identified several elements that could generate externalities related to liquidity, and therefore could justify some degree of regulation, where the main arguments are linked to asymmetric information and market incompleteness. 1 moreover, policies put in place by central banks after september 2008 have made moral hazard concerns for liquidity management more pressing. nonetheless, there are still open questions as to the kind of regulation to reduce the potential consequences of the imperfections in this area. there are no straightforward answers on this matter. some pending questions are : should a capital charge be put in place for liquidity allen and gale ( 2000 ), freixas and rochet ( 2000 ), and morgan, ( 2002 ). risk? is it necessary to impose an additional liquidity requirement to intra - day liquidity needs? should central banks act as the lender of last resort in this market? credit rating agencies the role played by risk rating in the subprime crisis is also an important corollary to the current crisis. to illustrate why some authors have gone as far as calling this “ the credit rating crisis ” ( benmelech and dlugosz, 2009 ) consider that before the crisis more than half of the structured finance securities rated by moody ’ s carried an aaa rating and, during the period 2007 -