of emergency liquidity assistance framework for the chilean financial sector. looking ahead, it is also important to bear in mind the challenges associated to digitalization and new business models in the financial sector. modernizing financial regulation and risk management also entails identifying potential risks and defining a regulatory perimeter that addresses the increasing pressure of digital developments ( such as those of new business models developed by fintechs, stablecoins, central bank digital currencies, decentralized finance, among others ). linked to it, operational resilience and cybersecurity have become a relevant issue for the financial industry. in this sense, regulation aim to set minimum standards that can guarantee the adequate functioning of financial services when it comes to face operational and cyber risks. lastly, it is also key to assess the risks posed to and by financial institutions data infrastructure and data use. at the central bank we are following closely these new developments in the financial sector locally and globally to understand potential benefits and to identify potential risks that need to be mitigated. we will keep monitoring these developments, to incorporate them in the regulation issued by the central bank on payments, as well as in the analysis of emerging risks in the financial sector that we provide in our financial stability report as well as in the new report on payments and infrastructures that we started publishing this year. challenges ahead i started this presentation explaining the measures taken by the central bank to reduce macroeconomic imbalances in pursue of its mandate of price stability and the main elements of the financial regulatory agenda which certainly has contributed to financial stability and will continue to do so in the next years. before concluding, i would like to refer to some of the challenges that lie ahead for our financial sector. a deep capital market is critical to support economic recovery and a play a relevant role to the resilience of the financial system and its ability to accommodate external financial pressure. therefore, it is imperative to recover our capital market. pension funds withdrawals affected this capacity and brought back our capital market some years in terms of size and depth. getting back on track is not an easy task and it requires a shared effort from the public and private sectors. in our latest financial stability report and monetary policy report we conveyed clear messages, as to the need to prioritize initiatives that contribute to strengthening the functioning of the financial system and avoid those that could harm it. the chilean economy is in the process of resolving macroeconomic imbalances and has the task of repairing the buffers that

especially important in a context where the state of the world economy seems less robust than just a few months ago, and where the risks facing emerging economies have increased. monetary policy has already added a very strong impulse, the peso depreciation is contributing and will continue to do so, and congress has approved a fiscal budget that considers a significant increase in public investment. we, as the central bank, reiterate that we will conduct monetary policy to ensure that inflation stands at 3 percent over the policy horizon, and we insist that every participant in the financial system needs to thoroughly evaluate their borrowing and lending decisions. at the bis central bankers ’ speeches same time, we will continue to contribute to chile ’ s development and welfare with what is our duty, namely the stability of our currency and the normal functioning of internal and external payments. thank you. figure 1 inflation and expectations ( annual change, percent ) jul. headline jul. expectations at december 2014 ( ees ) ( * ) ( * ) november and december calculations based on expected monthly variation as reflected in the ees. sources : central bank of chile and national statistics institute ( ine ). figure 2 domestic demand components ( annual change, percent ) - 10 - 20 - 20 - 40 private consumption gross fixed capital formation durables consumption gfcf machinery & equipment source : central bank of chile. bis central bankers ’ speeches figure 3 current account ( * ) ( percent of gdp ) - 3 - 6 - 9 saving investment current account ( * ) accumulated in one moving year. source : central bank of chile. figure 4 demand indicators ( * ) ( annual change, percent ) - 20 - 40 imports of consumer goods retail sales ( ine ) imports of capital goods ( * ) quarterly moving average. sources : central bank of chile and national statistics institute ( ine ). bis central bankers ’ speeches figure 5 business and consumer expectations ( * ) ( original series ) imce * * ex mining ipec * * * ( * ) value above ( below ) 50 points denotes optimism ( pessimism ). * * monthly index of business confidence. * * * economic perception index ( consumer confidence ). sources : adimark and icare / universidad adolfo ibanez. table 1 domestic scenario ( annual change, percent ) 2014 ( f ) jun. 14 report sep. 14 report 2. 5 - 3. 5 1. 75 - 2. 25 dec. 14 report 2015 ( f ) sep. 14 report dec. 14 report