, and i think we and they have been well served by a culture that emphasizes objective, expert analysis ; professionalism ; dedication ; and independence from political influence. whatever the fed may have achieved in recent years reflects the efforts of many people who are committed, individually and collectively, to pursuing the public interest. although the fed undoubtedly will face some difficult challenges in the years ahead, our people and our values make me confident that our institution will meet those challenges successfully. references adrian, tobias, daniel covitz, and nellie liang ( 2013 ). “ financial stability monitoring, ” finance and economics discussion series 2013 – 21. washington : board of governors of the federal reserve system, october. bis central bankers ’ speeches bagehot, walter ( [ 1873 ] 1897 ). lombard street : a description of the money market. new york : charles scribner ’ s sons. bernanke, ben s. ( 2013 ). “ the crisis as a classic financial panic, ” speech delivered at the fourteenth jacques polak annual research conference sponsored by the international monetary fund, washington, november 8. board of governors of the federal reserve system ( 2007a ). “ fomc announces it will increase the frequency and expand the content of economic projections released to the public, ” press release, november 14. — — — ( 2007b ). “ minutes of federal open market committee, october 30 – 31, 2007, ” press release, november 20. — — — ( 2012a ). “ federal reserve issues fomc statement, ” press release, december 12. — — — ( 2012b ). “ federal reserve issues fomc statement of longer - run goals and policy strategy, ” press release, january 25. — — — ( 2013 ). “ federal reserve issues fomc statement, ” press release, december 18. chen, han, vasco curdia, and andrea ferrero ( 2011 ). “ the macroeconomic effects of large - scale asset purchase programs, ” federal reserve bank of new york staff reports 527. new york : federal reserve bank of new york, december. chung, hess, jean - philippe laforte, david reifschneider, and john c. williams ( 2012 ). “ have we underestimated the likelihood and severity of zero lower bound events? “ journal of money, credit and banking, vol. 44 ( february supplement ), pp. 47 – 82. congressional budget office ( 2013 ). estimated impact

deep and liquid fx market that could work as a critical shock absorber took decades of implementing consistent policies and avoiding the temptation of using capital flow management measures. the journey began after the crisis of 1994 - 1995, when banco de mexico was forced to adopt a flexible exchange rate regime. at that point, it was clear for the local authorities that, in order for the mexican economy to achieve long - term development and integration to global trade and financial markets, it was essential to develop a deep and liquid fx market with an efficient price discovery process. such situation required profound reforms. among the most relevant were : 1. adopting full convertibility of the mexican peso. 2. developing a derivatives market that could allow market participants to hedge against exchange rate fluctuations and manage fx risks. 1 / 5 bis central bankers'speeches 3. introducing risk - management regulation to avoid currency mismatches in the domestic financial system, fostering long - term peso financing and hedging practices to enhance intermediaries, corporates and households ’ resilience against large tail - risk fx adjustments ; and 4. adopting the best fx market trading and settlement practices. for instance, since 2008 the mexican peso has been included in the cls system, allowing the mxn to trade on a 24 - hour basis. these reforms had a very positive effect on the liquidity and depth of our fx market. according to the 2020 bis triannual survey, the mexican peso is now the second most traded currency in emes, with a daily total turnover of 114 usd billion, including spot, forward and swap transactions. the development of our fx market has had a virtuous effect on other markets as well, including the money and fixed - income markets, playing a critical role in broadening the investor base in domestic debt instruments and lowering the cost of funds. it has also allowed market participants to rapidly adjust their investment positions and adapt to difficult market environments. as such, the flexible exchange rate, supported by the better functioning of our fx market, has served its function as a shock absorber, reducing output and nominal variables ’ volatility. furthermore, in an exchange rate market like the one i described, there has been a lesser need for fx interventions. i should stress that the development of deep, liquid and resilient financial markets must be accompanied by the development of sound economic fundamentals and strategies for long - term crisis prevention and mitigation. the goal has been to design and follow an appropriate