taking the necessary precautions ( to a greater or lesser extent and according to their needs ). some of them have established capital inflow controls ; others, like argentina, seek to mitigate exchange volatility, accumulating international reserves at a time when our balance sheet situation allows us to do so. chile and mexico, for instance, take the opportunity to build - up fiscal resources through the operations of state - owned exporting enterprises and the treasury. for an economy, which have suffered a severe institutional crisis and is still in transition towards its long - term cruising speed, a managed - floating regime emerges as a useful tool to mitigate these effects while advancing in the development of an adequate financial infrastructure to create conditions for resources to be efficiently channeled towards the funding of worthy investment projects and, in turn, strengthen traditional monetary policy instruments. while there were some turbulences in the recent past with no significant effects, this adjustment process towards equilibrium has not yet been tested. this requires us to implement sound and consistent policies to comprehensively protect our economies against external misalignments. in the case of argentina, this implies, for instance, providing monetary and financial policy with longterm sustainability on the basis of four main pillars – a consistent monetary policy that ensures money market equilibrium ; a countercyclical prudential approach ; a system that is independent from public sector needs ; and a policy framework that boosts credit to firms and households. the first of these pillars is largely determined by our recent history : in argentina, monetary regimes have unsuccessfully shifted from one extreme to the other. while in the 1980s money supply was rising uncontrollably in line with the monetization of the fiscal deficit, in the past decade the strictures of the convertibility regime were neither consistent with the economy ’ s flexibility nor with the fiscal behavior. what mattered was not the label of the regime, but the internal consistency of its policies. in an economy where macroeconomic variables are still seeking a long - term stability path and transmission mechanisms through credit are still limited, the current monetary policy helps us to ensure the strict and ongoing money market equilibrium. in order to preserve this equilibrium, the central bank applies a deep monetary absorption strategy coupled with foreign exchange purchases for prudential purposes. thus, it has absorbed some ars 80 billion since 2005. such a strategy has been implemented through various mechanisms that comprise the issuance of bills and notes, repo operations, the pre - payment of liquidity assistance provided to

up of financial imbalances which proved unsustainable. in those conditions, a minor change may suffice to trigger a financial market collapse. it is difficult to rationalise such an outcome unless it is the result of some kind of coordination between economic agents on a bad equilibrium. some contributions presented here mentioned strategic complementarities, an explanation which cannot be completely ruled out. indeed, it seems that the driving force behind the massive securitisation era was, for most participants, regulatory arbitrage. therefore, it comes as no surprise that the main policy response has focused on regulation. indeed, there is a widespread consensus that the cause of the current financial meltdown stems from the failure or even the absence of regulation in important segments of the financial system. but it may also have implications for monetary policy, to which i turn now. some implications for monetary policy central banks have been on the frontline since the crisis unfolded in the summer of 2007. a dramatic change occurred however after the collapse of lehman brothers where we had the sentiment that we were moving into uncharted territories : spreads reached unprecedented levels both on the money and credit markets, leading to a worsening of financing conditions across industrialised countries. without action some important parts of the transmission mechanisms would have been significantly impaired. in such a context, major central banks embarked on unconventional policies by : • increasing central bank liquidity ; • influencing risk premia on private financial and credit instruments. such policies are referred to as credit easing policies ; • pre - committing to conducting very low interest rate policies for as long as necessary in countries where the interest rate has already reached its lower bound. all these policies are set out as temporary policies and deemed to be used in times of stress only. it is obviously too early to gauge their overall impact. so far, they have been effective with regard to market confidence, and have contributed to a significant reduction in various credit risk premia. one channel relies on portfolio composition effects. i know that some contributions presented here made that point in a very sophisticated framework, i. e. positive feedback effects may be generated through the greater liquidity of investing entrepreneurs. obviously, the soundness of the financial system is critical to the success of these unconventional policies. these policies must be viewed as state contingent policies : they are conditional on the state of the economy. a significant part of the intervention is short - term oriented, as the acquisitions focus on short - maturity assets. furthermore, the assets purchased are