Let me delve into some aspects of these pillars. In terms of regulation and supervision of the financial system, the causes and effects of the crisis of 2008-2009 have taught great lessons to policy makers around the world. Suffice is to mention the changes that are being effected in the United States and the Eurozone, such as the Dodd-Frank Act and the instauration of a European banking authority. In Chile, our financial system was not involved in the practices that originated the crisis in the developed world, because our legislation does not allow it. Even so, we are permanently reviewing our legislation in light of the experiences and best practices in place today in the world. Another significant aspect has to do with our foreign exchange policy. In recent weeks the peso has appreciated against the dollar, prompting some sectors to demand intervention by the Central Bank. I think that some clarification is in order. In the first place, I reaffirm the validity of a flexible exchange rate for the Chilean economy. Our economic history is full of examples in this area. So far, the scheme that has yielded the best results for economies similar to the Chilean is a floating exchange rate regime. When policy makers sought to artificially control the value of our currency, imbalances were generated that ended up being very costly for the country. The adoption of exchange rate flexibility in 1999 has allowed us to wade subsequent complex moments.
For good reasons, the Chilean economy is open commercially and financially to the world, and, because of the nature of its exports, is strongly affected by shocks coming from abroad. In the past we have benefited from the external situation. We have also felt the consequences when the external situation has deteriorated. We cannot isolate ourselves from these external impulses, and it would not be a good idea to do so. The important thing, however, is that we have developed a policy framework that allows us to absorb and mitigate these shocks in the best way possible. Chile needs to keep a robust macroeconomic and financial policy scheme that helps it overcome effectively these external disturbances at the lowest possible cost for the country. BIS central bankers’ speeches  1  Part of this scheme is the autonomous central bank with clear-cut objectives: low, stable inflation, and the normal operation of internal and external payments. Our monetary policy is oriented at attaining an explicit inflation target over a medium-term horizon, by applying an independent monetary policy that contributes to stabilize the business cycle. Its complement is a floating exchange rate regime. Another important element is responsible and predictable fiscal policy making, as reflected in its governing rule. Add a sound financial system, with proper regulation and supervision. Plus ever growing commercial and financial integration. The fact that the deterioration of the developed economies has not hit our exports so hard is the result of this diversification of external markets, among other factors.