literature has shown results that are ambiguous or contrary to those produced by the usual “ technology ”, especially in relation to the approach that relies on the interest rate as the single instrument. the same applies to the managed floating exchange rate regimes. recent empirical papers that refined the analysis started by several academics argue against sharp fluctuations in the domestic currency. instead, mitigating excessive volatility, especially in developing countries with rather shallow capital markets and limited access to hedging instruments, seems to be an appropriate policy. this kind of monetary and financial framework that ensures systemic stability has been my main task during the last years. this means giving priority to avoiding " the next crisis " and building buffers to minimize the effects of disruptions. in my country, the decades of macroeconomic instability and recurrent crises were not harmless in terms of welfare. although latin american countries have shown lower economic growth rates and higher macroeconomic volatility than other regions, the case of argentina is on a different scale. if we consider the past 30 years, the average growth in latin america was less than half of asia ’ s, with volatility that nearly doubled asian levels. in that period of time, argentina ’ s growth was three times lower than in emerging asia, while volatility turned out to be eight times higher. this process triggered enormous economic and social losses, hindering on our chances to develop and leading to changes in our citizens ’ behavior. indeed, the consequences of this process include portfolio dollarization ; fiscal dominance ; obstacles to develop a long - term credit market ; and the marked negative correlation between changes in retail deposits and foreign exchange fluctuations. these factors, which undermined the power of some traditional monetary policy instruments, have played a key role in the design of our current monetary and financial system. in particular, our risk management strategy based on four pillars ( permanent equilibrium in the monetary market, managed floating exchange rate regime, development of external liquidity buffers, appropriate financial regulation and supervision ) is compatible with these aims as well as with the tools available. this scheme, which was carefully developed along recent years, now allows us to overcome each episode of stress, minimizing the impact on the real economy and avoiding inconsistencies that might make it unsustainable over time. over the last two years, we have experienced four periods to significant financial stress in the domestic market and our monetary and financial framework has delivered. in each of the events, we first reacted firmly to normalize

start the credit market. ppip, talf, tslf, tarp ; it is even hard to track such an extensive list of programs aimed at supplying liquidity, fresh capital and re - starting securitization but more with the goal of boosting market activity than crowding it out. on the demand side, one drawback going forward is that financial institutions are not likely to take advantage of excessive leverage as it happened in the past. on the supply side, much debate is around exit strategies. particularly, how the fed is going to deal with the massive liquidity provision, which is seen as an increasing inflationary risk. however there is a point to be made on the opposite direction : i mean a deflationary scenario as a result of the unwinding of the liquidity provision. if the fed obtains any profit due to its operation ( given a revaluation of financial assets bought, which would, of course be, a good news ) it would end up withdrawing more cash from the market than the formerly issued. this could trigger a new dry up on the markets. so, it is not just about returning to the pre - crisis balance sheet of fed. in my view, the roadmap for a sustainable recovery of should have several features such as : i ) long term funding, which is still absent ; ii ) households balance sheets repair ( the microfundamentals point to additional adjustment still to come ) ; iii ) banks balance sheets repair ; the banking will be redesigned on the basis of simpler criteria, with lower leverage and more capital. burying the old system and enabling a new one to emerge will take time ; and iv ) long - run fiscal and monetary sustainability. on the other edge of the atlantic, europe is caught in a delicate situation. first, the divergence between policy makers about fiscal and monetary policy measures to prevent a deepening of the slump. and, second, the “ east menace ”, which is the sizable exposure of its banking system to eastern europe risk. currency mismatches and their impact on credit risk still poses significant challenges for the region. in fact, the whole periphery ( both east and west ) is under scrutiny due to the brutal adjustment in aggregate spending that is yielding sky - rocket unemployment. in the emerging world, the adjustment is also taking place. and, in some cases, it is showing up the hard way. we witness asian economies suffering from a collapse on trade which is mostly region - driven.