response, together with an expansionary fiscal policy, facilitated a speedy adjustment. after only one year of negative annual growth in 2009, the economy was able to sustain growth rates above 4 percent in the years that followed. the inflation rate fell well below the target range for about a year, but inflation expectations remained anchored at the 3 percent target in the two - year horizon. undoubtedly, this is the strongest countercyclical macroeconomic policy response we have ever articulated, proportional to the magnitude of the shock, but our monetary policy framework has also been useful to face subsequent challenges at home and abroad, like the end of the commodity price boom in 2013 - 2014, delivering lower price and output volatility. in each of these episodes, anchored inflation expectations, automatic fiscal stabilizers, foreign exchange hedging, and a sound financial sector have contributed to provide monetary policy with sufficient room for maneuver. but it is crucial to remark that these factors are not exogenous to macroeconomic policy. they were nurtured by a consistent macro policy framework built and maintained in the last two decades. the challenge for central banks the chilean experience illustrates that for forward inflation targeting to work, central banks need to develop the right set of tools — data sources, models and judgment — to formulate and communicate a policy path that is coherent with such convergence. as the local and world economy evolve, the relevance of all these tools needs to be kept constantly in check. over time, economies are subject to major changes, especially in the case of emerging economies, and this may alter well - established relationships. the current focus in the relevance of the phillips curve and price dynamics is a good example of this. but the extent to which structural changes involve a permanent change in the responsiveness of prices to output gaps or one - off changes delaying inflationary responses for some time is equally relevant, especially for policymaking. this also applies to structural changes that are especially relevant for emerging countries, like demographic transition or the lengthening of international value chains. central bank of chile october 2018 the quantity and quality of data available to make monetary policy decisions may also change substantially over time. the traditional dominance of regular economic surveys is increasingly challenged by growing administrative datasets and big data. in this regard one should never forget that data is only an instrument to capture true economic behavior. from a policymaking perspective, data collection, processing and statistical methods are a way to produce evidence for better decision making. a central bank that operates in a forward

“ evolving landscapes of bank and non - bank finance ” banca d ’ italia - lti @ unito conference panel on “ institutional investors ’ asset allocation and the real economy ” opening remarks by the deputy governor of the bank of italy fabio panetta carlo azeglio ciampi centre for monetary and financial education rome, 7 december 2018 i am very happy to be here today at this joint banca d ’ italia - long - term investors conference on the evolving structure of bank and non - bank finance. as the first session already highlighted, the conference provides useful indications on how to stimulate firms ’ access to market finance, alongside the traditional banking sector. my role today is to chair the roundtable on “ institutional investors ’ asset allocation and the real economy ”, which focuses on how institutional investors can contribute to expanding the range of services and the volume of financial resources available to businesses. the panel will benefit from the contributions of distinguished participants, who will share their experience in the field with us. but before we start the discussion, let me briefly explain why, in my view, it is crucial that institutional investors play a larger role in funding the real economy. the global financial crisis of 2008 was triggered and amplified by developments in the banking industry. 1 in the preceding years, banks had increasingly adopted the “ originate - to - distribute ” model, so that instead of holding the loans they had originated on their balance sheets, they transferred them to third parties. this weakened incentives to carefully screen and monitor debtors. loans were repackaged and passed on to other entities, but in many cases the risks ended up being borne by banks ’ off - balance sheet vehicles and conduits. the rapid expansion of the banking system made the real economy highly vulnerable to financial shocks. the risks connected with an overstretched banking sector emerged fully during the financial and sovereign debt crises. since then, regulatory action has been taken to rein in the banking sector. wider and tighter prudential requirements at the global level2 and, in europe, the single supervisory brunnermeier, m. k., “ deciphering the liquidity and credit crunch 2007 – 2008, ” journal of economic perspectives 23 ( 2009 ), 77 – 100. the main regulatory changes adopted after the crises include higher capital requirements, the introduction of liquidity requirements and a minimum leverage ratio. mechanism, the single resolution mechanism and the bank recovery and resolution directive are acting to discourage excessive risk taking by banks. the burden of bank