perspective of someone from a small, rural, agricultural community, who has worked as a community banker and as a state regulator. those aren ’ t typical experiences for a fed policymaker. this diversity is a strength, as congress recognized by creating a role on the federal reserve board designated for someone with community banking experience. i am the first to serve in this capacity, and i strongly believe that our economic and financial system is strengthened when we consider the implications of our regulatory decisions for bankers on main street as well as on wall street. i approach our monetary policy deliberations in a similar way. our actions in response to the recent pandemic have clearly benefited from this perspective, as we understand how the varying state and local approaches have affected economic conditions across the nation. in closing, it is appropriate that during this election season we honor the women who secured 1 / 2 bis central bankers'speeches that right, first in kansas, and then through their campaign to ratify the 19th amendment. the greatest tribute to those women, and the best way to honor their legacy, is to vote. another way is through public service, and i would strongly encourage all — but in particular women — to consider serving in government at the local, state, or federal level. it is the most challenging, but by far the most rewarding work that i have done, and i hope you will consider serving as well. thank you again for this honor. 2 / 2 bis central bankers'speeches

there is any particular monetary policy framework that is suitable for all countries for all times. the central bank ’ s choice of monetary policy framework should depend on the objectives it aims to achieve, on the challenges that the economy faces, and on the structure of the financial markets and the economy in which it operates. and it is likely that the monetary policy framework will change over time as the domestic economy and the international financial system develop. the exchange rate regime is a key consideration. in recent decades, developing economies have experienced increasing capital mobility and financial integration into the global economy. over the longer term, this is a welcome development that will help meet the substantial financing needs of the private and public sectors, but greater financial integration and financial flows also complicate monetary policy in an environment in which exchange rate considerations are important – and they are generally very important. these are small open economies in which external shocks are often large, and the excessive volatility inherent in free - floating exchange rates can be costly. as a consequence, many developing and emerging market countries both intervene in the foreign exchange markets and impose restrictions on capital inflows and outflows. why not simply peg the exchange rate? according to the impossible triad, or the more sophisticated version developed by helene rey, the impossible duo, a pegged rate, combined with capital mobility, makes it difficult for monetary policy to be used independently to achieve macroeconomic stabilization and price stability. 6 nonetheless, some economies have successfully implemented pegged exchange rates. hong kong and francophone africa are leading examples. properly managed, some flexibility of exchange rates can help economies absorb external shocks, including swings in prices of commodities to which these economies are still heavily exposed. accordingly, there has been a shift toward flexible, but managed, exchange rate systems among emerging market and developing economies. however, none of us should underestimate the difficulties of managing the exchange rate and of developing knowledge about when and how much to allow the exchange rate to move in response to domestic and external economic shocks. even beyond the management of the exchange rate, central banks in developing countries face difficult challenges in developing their monetary policy frameworks. for many years, the standard international monetary fund approach to monetary policy – which embodied the monetary approach to the balance of payments – emphasized money targets. but this approach has become less tenable as economies have evolved and matured. as you know, the effectiveness of such a framework depends, among other things, on the stability of the money demand function and on the