Mario Marcel: Challenges for monetary policy from global financial cycles

Keynote speech by Mr Mario Marcel, Governor of the Central Bank of Chile, at the IMF-SNB 8th High-Level Conference on "The international monetary system challenges for monetary policy and the global safety net in an evolving global economy", Zurich, 8 May 2018.

The views expressed in this speech are those of the speaker and not the view of the BIS.

I would like to thank the organizers for the opportunity to discuss the evolving relationship between Global Financial Cycles and monetary policy at the national level. This is a topic especially important to emerging market economies (EMEs) like mine, for which economic and financial openness went hand in hand with strengthening its macroeconomic policy framework over the last 30 years.

Such external openness leads analysts to frequently rank my country very high in terms of exposure to international trade and financial shocks, only to see such shocks having a milder impact on the economy when they happen. While we believe that such gap is to a large extent due to our appropriate monetary and fiscal policies and the institutions supporting them, we are aware that this does not mean full insulation from global developments, including, of course, Global Financial Cycles.