, the economic and financial situation of some emerging markets is under pressure as a result, among other factors, of the combination of monetary policy normalisation and strong fiscal stimulus in the united states. last summer financial conditions in most emerging market economies were tightened, giving rise to considerable outflows and steep exchange rate depreciations, particularly in argentina and turkey. this sharp market reaction should be a reminder of the risks that the normalisation of monetary policy at the global level could entail, in particular for those countries that have accumulated macroeconomic imbalances. 3 / 5 second, a potential increase in economic and geopolitical uncertainty stemming from escalating trade tensions could adversely impact global growth. in this regard, the latest forecasts by international organisations already reflect some impact and, indeed, global growth and global trade has already begun to lose momentum. in addition to protectionist escalation, sources of geopolitical risk have also grown in europe as a result of brexit negotiations and the fiscal situation in italy. but how have financial conditions actually evolved in this new scenario? until very recently, financial conditions in advanced economies remained loose, while conditions in emerging markets had tightened. interestingly, us interest rates have increased at the longer maturities, but still modestly. nevertheless, a materialisation of current risks might lead to a “ snap - back ” scenario of sharply rising long - run yields, driven by a sudden decompression of term premia, that might amplify market stress and harm the economy. in this context of growing near - term risks, a better understanding of volatility, the second topic of the conference, is also crucial for central banks, given the implications for monetary policies and financial stability. the period of ultra - loose monetary policy has driven a prolonged period of low volatilities. nevertheless, global markets could be entering a new phase of higher volatility or more frequent short - lived bouts of instability as interest rates increase. moreover, volatility markets – in particular, volatility - linked derivatives – have become more popular in this low - uncertainty environment. negative surprises in these markets might amplify shocks and impair the functioning of key markets, potentially even affecting the financing of the real economy. the surge in volatility witnessed last february illustrates this point. central bank policies are affected by this scenario in at least two dimensions. first, it makes more challenging the definition of an adequate monetary policy normalisation path

operations and the evaluation of systemic risk measures. finally, the fourth session on uncertainty will deal with the spillovers from the uncertainty on certain financial markets to the macroeconomy or to other markets. and now, allow me to introduce you to our first speaker, ricardo reis. we are particularly honoured to have him here today. it is most appropriate he should be our first keynote speaker given his profound knowledge on the topics to be addressed in this conference. among his recent honours, i would recall that last year he received the 2016 bernacer prize at the banco de espana as the best european economist under the age of 40 working in macroeconomics and finance. his keynote speech today will focus on “ central bank swap lines ”. ricardo, we are very grateful to have the opportunity to exchange views with you again in our institution. the floor is yours. 5 / 5