it serves as a primary benchmark for pricing in other financial markets, both domestic and global. last, but definitely not least, it ’ s vitally important for the effective transmission of monetary policy to the broader financial system and to the economy. thankfully, most days — most years — the treasury and related markets function incredibly well. but in the past decade, these markets have experienced three abrupt and notable disruptions, each of increasing severity. first was the so - called flash rally of october 2014 ; then, the repo market distress in september 2019 ; and third, the extraordinary dislocations at the onset of the covid - 19 pandemic in march of 2020. general george patton once said, “ prepare for the unknown by studying how others in the past have coped with the unforeseeable and unpredictable. ” it ’ s a good piece of advice — and one that 1 / 4 bis central bankers'speeches should guide our work on treasury market reform. the iawg report i mentioned earlier reviews these events, so i won ’ t repeat them here. however, two lessons are clear. first, the unforeseeable and unpredictable will happen, and can result in significant stresses in the treasury and related markets that may spread to broader financial conditions. second, when disruptions have been sufficiently severe and persistent, the market has not been able to quickly self - correct without official - sector intervention. the severe disruptions to the treasury and funding markets in march of last year illustrate these points. the incipient breakdown in market functioning quickly spread to other segments of the u. s. and global financial markets, risking a broad - based pullback in the availability of credit that is essential for our economy. the speed and extent of the market disruption necessitated immediate and dramatic action, the scale of which was truly unprecedented. at the new york fed, we are used to talking in very large sums, but even for us, the figures were staggering. we were offering overnight repos of up to $ 1 trillion, as well as substantial amounts of term repos of longer maturities. 2 the sizeable offerings were designed to meet the markets ’ needs and provide confidence that liquidity would be available. at their peak in mid - march of 2020, our repo operations reached nearly $ 500 billion. but repos alone were not enough to restore smooth market functioning. the fomc also directed the open market trading desk at the new york fed to engage in large

system. this has been the work of many. the main goal has been to establish resilience to shocks. this we have achieved and the overall results can among other things be seen in the development of the net international investment position which is now positive. the icelandic economy has moved from being in debt to the rest of the world to being a creditor country - which is in a way a testament to our policies. i would like to quote helen rey on how you create resilience : “ independent monetary policies are possible if and only if the capital account is managed, directly or indirectly, regardless of the exchange - rate regime ” today, i will discuss six lessons that may be drawn from the icelandic experience of building a “ new ” financial system. first of all, one actor in charge. one of the main problems prior to the crisis was that there was no single actor responsible for financial stability. we had several actors with unclear responsibilities. but with the merger of the fsa and the central bank in 2020, the chief responsibility for financial stability was assigned to one institution, the central bank. following the change in the central bank act in 2020, three committees take all central bank policy decisions : the monetary policy committee, the financial stability committee, and the financial supervision committee. all the committees have external as well as internal members. the set - up, inter alia with official policy statements and publication of minutes, ensures transparency in the decision making, how decisions are taken and why. in my capacity as governor, i chair all three committees, but i have only one vote when decisions are taken. second lesson, managing the balance of payments. we abolished the capital controls, but we have maintained indirect control of the balance of payments through macroprudential policies and measures and also by building up and strategically using our foreign currency reserves. in 2011, there was a volcanic eruption in iceland, which you may remember because air traffic came to a halt over the north atlantic and much of europe for a couple of weeks. we have this saying ; all publicity is better than no publicity, and even very negative publicity became a fiery start of the tourism boom in our country. tourist arrivals went in just a few years from 300, 000 per year to 2. 5 million. when the tourist boom took off the central bank used the opportunity, provided by the associated currency inflows, to accumulate foreign reserves in the open market. since then, we have used the reserves to maintain stability and ensure liquidity