I think we’ve made real progress on this front. Non-nationals for example, play an important part not just in our commercial life but in the governance of our market institutions. And I very much welcomed the initiative by the Foreign Bankers’ Association to establish the Guild of International Bankers, which itself followed the opening up, to non-nationals, of the City Freedom. It is economic activity - not nationality - that generates employment and income - and even, Chancellor, tax revenue - and that’s something, too, which is now better understood than in many other jurisdictions. It is crucial that these approaches continue - as I have no doubt they will - into the future - whatever that might hold. I have also been impressed, my Lord Mayor, by the increasing commitment among City firms including many firms from overseas - not just to professional, but also to social responsibility. And in this context I have been greatly encouraged by the widespread and very positive response to the  2  BIS Review 29/2003  Heart of the City campaign launched nearly three years ago to encourage and extend City corporate community involvement. I hope that that, too, will continue. So I take the opportunity this evening to express my thanks to all of you represented here who have worked with us at the Bank over the years in so many different ways, through good times and bad, to secure the City’s position as the pre-eminent global financial market place.
Perhaps the most important program was the purchase of deteriorated portfolios by the Central Bank under a variety of schemes, including repurchase agreements, and in exchange of debt instruments, liquid resources, and a new liability called “Subordinated Obligation”. The impact of these programs on the assets side of the Central Bank balance sheet was huge, and so were the costs of the complete rescue plan. Altogether, it is estimated that only the direct fiscal cost of the Chilean Financial Crisis of 1982 reached 41% of GDP. The aftermath of the crisis The lessons learned from this crisis highlighted the fact that banking regulation and supervision needed to be substantially upgraded. In 1986, the General Banking Law introduced limitations on currency mismatch, constraints on related party lending, and restrictions for banks to receive  Page 2 of 5  Central Bank of Chile March 2019  goods instead of liquid resources; all of them, elements which were common practice before the 1982 crisis. Paradoxically, what could be considered harsher regulation did not hamper financial deepening. Instead, it fostered solvency and credibility of the banking system and allowed its healthy development in the ensuing decades. Regulation and Financial Development Credit has a valuable role in the economy. Financial intermediaries channel resources from agents that save, to agents that need to borrow to smooth consumption or finance profitable projects.