however, that step might not suffice to convince markets and agents in the real economy that we are serious about reaching the inflation target. allowing for a period of above - target inflation to compensate for a sustained undershoot might be an additional tool to increase inflation expectations. crucially, we must maintain our flexibility in order to ensure that we continue to effectively carry out our mandate. beyond monetary policy, the importance of macroprudential policy will only grow in the low interest rate environment – especially considering the current level of monetary accommodation and the possible side effects of the non - standard measures. the time is coming when policymakers will need to consider tightening selected macroprudential policy tools to tackle pockets of elevated vulnerability. for instance, throughout the covid - 19 crisis the demand for housing continued to increase in many countries, drawing attention to risks in the residential real estate sector. these include a possible house price overvaluation, elevated household indebtedness and high residential real estate exposures of banks. let me now turn to the emerging markets. during the peak of the pandemic crisis, capital outflows from emerging market economies ( emes ) were unprecedented in scale and speed – but also short - lived. emes, including moldova, shed their “ fear of floating ” and allowed the exchange rate to move and absorb the shock. in sharp contrast to previous crises a full one - third of emes have employed quantitative easing ( qe ). in the past, emes generally tightened monetary policy to avoid rapid capital outflows and the inflationary effect of exchange rate depreciations. the current crisis has seen eme policy reaction being more in line with that of advances economies, with qe being launched even 2 / 3 bis central bankers'speeches before reaching the zero lower bound on policy rates. financial markets mostly responded favourably to the qe announcements. central banks successfully communicated that they stood behind their sovereign should fiscal expansion undermine investor confidence. long - term interest rates decreased in response, while exchange rates did not move significantly. how can we explain this eme resilience? of course, large - scale injections of new liquidity by the fed and other systemic central banks have eased global financial conditions and redirected investors to emes in the quest for better - yielding asset classes. let us not underestimate, however, the progress achieved by the emes themselves. in recent years, a number of emes have strengthened their monetary policy

welcoming remarks by jerome h. powell chair board of governors of the federal reserve system at the 2022 community banking research conference, sponsored by the federal reserve, the conference of state bank supervisors, and the federal deposit insurance corporation st. louis, missouri ( via pre - recorded video ) september 28, 2022 good morning, and welcome to the 10th annual community banking research conference. i have attended this conference twice before, including the first one back in 2013, and i can attest to the quality of the research and discussions. while i am coming to you virtually today, many of you are gathering in person for the first time in three years. i am sure it will make an excellent event even more enjoyable. the community banking research conference brings together researchers, regulators, policymakers, and community bankers to discuss the unique and important role community banks play in our economy. the conference was launched in the years following the financial crisis, in a collaboration by the federal reserve, the conference of state bank supervisors ( csbs ), and the federal deposit insurance corporation ( fdic ). the conference was developed to deepen our understanding of the community bank business model and to provide a forum to discuss research with academics, policymakers, regulators, and community bankers. the research presented over the years has informed supervisory and regulatory policy debates and continues to challenge our thinking. it has highlighted the vital links between community banks and small businesses, the availability of credit in low - and moderate - income communities, how community banks support their local communities in times of crisis, and the impact of technology. a critical feature of the research sessions is that community bankers join academic moderators to provide feedback from a practitioner ’ s perspective. the challenges facing community banks have changed significantly over the past 10 years. community banks have demonstrated remarkable resilience, and conferences like this have helped regulators and supervisors to better understand those changes. - 2i want to congratulate the federal reserve bank of st. louis for a decade of hosting an important and informative conference. and i want to thank our colleagues at the fed, the fdic, and the conference of state bank supervisors. on a sadder note, i want to recognize the passing of john ryan, who was president of the csbs, this past may. john ’ s impact on the csbs and his contributions to the financial services sector overall were significant, and he is missed by all who knew and worked with him. thanks also to the researchers and all the community banking professionals