 Well, thank you very much for the invitation, Lema, and for the opportunity to be in this beautiful city for the first time in my life, and also for the opportunity to share with you my views on the Chilean experience with financial sector reforms, as you were mentioning, and with crisis management. Before starting, let me make a few, maybe a disclosure, or maybe even two of them. The first one you mentioned is good to say what is the perspective from where you're talking, what is the bias that I have. I was in charge of banking regulation in Chile until last March. So I'm pretty much focused today in this presentation on financial stability, and I have this concept of prudence in my head. And it's hard to move away from that because I was there just a few months ago. The second disclosure is more human maybe than the one before, and as you already know, I'm from Chile, and you also know that the World Cup is in the process. And just a few hours ago, about five, six hours ago, Chile was eliminated from the World Cup, and it was eliminated in the worst of all possible ways by the local country, which is Brazil, which is kind of a powerful soccer team, after time 1-1, not only after 90 minutes, but then they went to half of 15 minutes each, so after 120 minutes, we tied 1-1, and we lost by one penalty. So basically, I'm in a bad mood, and I'm a little bit tired also because I was watching the game on TV, so don't give me a hard time, OK? Please. Fine. Let me then start my presentation and use my 25 minutes. Remember, I'm in a bad mood. Remember, so OK, now I'm going to say it for 20 minutes. OK, so I'm going to try to be as precise and focused as possible so that we can have time later to speak about the hundreds and thousands of possible topics that could emerge in a conversation about financial regulation and financial reforms, especially after the Supreme Crisis. But let me just try to focus in some very simple messages. My presentation has three parts, and for the sake of clarity, let me say that the three parts are basically a story. I'm going to tell you a story. I'm going to tell you a message, and I'm going to mention a concern. And those are the three parts that my presentation has. The story is a great story. It's a story of a crisis that did not happen, and this is going to be very important, which is the Supreme Crisis in Latin America. The message is, and believe it or not, as it says there, is a positive message from the developing country to the developed world. That's why I say believe it or not. I didn't think I was going to be alive to tell that message. And my concern has to do with basically the kind of challenges that we're facing today, given the new restrictions that the world is facing, and the new restrictions that these developing countries are facing in comparison to what they were facing before, say 10, 15, 20 years ago, when we basically faced some pretty dramatic crisis. So let me start with the story, with, as I mentioned before, the great story. The two crisis, I don't know if you are aware or not, but in the early 80s, there was a huge, a huge death crisis in Latin America. I'm going to show you some pictures, some figures, that are going to allow me to give you a broad idea of what happened at that time, so that you get a sense of what happened. But let me first, just to make sure that I make myself clear, start by saying the following. Just put yourself in the shoes of somebody. I mean, none of us is young enough to be less than 20. So we all have some experience. And imagine that they tell you that there is a large and deep global financial crisis. The second one, only to the Great Depression in the late 20s, early 30s, almost 100 years ago. This is the sovereign crisis. So what would have been your guess in terms of the impact of that crisis, especially when it's a financial crisis, in the developing world? The world disaster is the first one that comes to mind. Well, this time it was different. And I'm thinking about Rogoff and Carmen Reinhart and so on. In this case, it was different. And the reason it was different, and I'm going to try to elaborate on this, is because Latin America, as it says there, learned the hard way, the numbers are going to show that, when their countries face their own financial crisis in the early 1980s. So let me go in two minutes to three figures. This is the first figures that tells the story of our own crisis. And I mean the Latin American crisis in the early 80s. Let's see if this, yeah. You see, so I'm starting here in 1980. The crisis happened at some point in 82, 83. You can see there are three, six, about 10 countries from Latin America have chosen them in terms of how large they are, or how important economically they are in the region. And you see that most of them, it's not all of them. There are some just face a huge reaction in output. This is GDP here in the vertical axis. They're normalized to 1 in 1980. And you see that some of them went down by 15, almost 20% in a two-year period. We all know that we're coming from the emerging world, most of us. So that's a dramatic impact in an economy, right? 20% drop in real output in two years. Now, that's dramatic and we could speak two months about that, I know that. But I want to focus on something different. What I care more about here in this picture is the recovery, because even though almost all the countries, even Colombia, Colombia won yesterday night, actually, the Uruguay. So they are gonna face Brazil on Saturday or something like that. They're gonna lose with Brazil on Saturday. So Colombia, Colombia, they behaved very well. They didn't have that problems, but they also face a huge crisis. Container was important in the region for everybody. But the recoveries were very different. And we typically talk a lot about Chile because Chile is one of the countries that kind of emerged in a successful way from this crisis. You can see the red line there going down like 15%. And then to some, almost back in trend, I put the trend there, imagining a 2% GDP per capita growth per year just to follow the traditional macro fact. But the point is that Chile was almost back in trend as if it didn't have that 20% or 18% drop in output by a decade later. I mean, that's very successful. Other countries stagnated. Now, even though not everybody recover in the same way, there are some successful stories and there are some failures here, all the countries end up doing something different and that changing the regulation after the early 80s crisis. And 25 from 82 to 2008 or something like that trend, almost a quarter of a century later when they were forced to face this second largest financial crisis in a century, the super crisis, you can see that we had some impact. Of course, in Chile, we had a minus 1% growth in GDP but it was nothing compared to what we had before. And here there were no assumptions. Every country did fairly well. Well, what I'm trying to say here is that the reason why countries had different recoveries after the early 80s debt crisis and the reason why they end up facing the new huge, in some, to some extent, more important financial crisis in 2008 in a successful way is because they made policy decisions that allow them to basically come out successfully from this dramatic event. In opposition to what happened in the developed world. So let me, well, and the result is a beautiful picture of prosperity. Since you're talking about growth. Some of them, like Venezuela, have had a lot of problems. Now I'm using again, 1980 as one here and I'm going back to 1960. And you can see that after 20 years of some heterogeneous growth across countries, some of us in the region really grew fast after the early 80s crisis. And Chile is today about three times what it was in the early 80s. What Chile was able to accomplish in the last three decades is more than what it had accomplished in the previous eight decades. And today it's a $20,000 PPP per capita country. At that time it was a $2,000 per capita country in real terms. And there are some other successful stories also like Uruguay and Colombia and so on. Some of them are more recent and this is why it's not so dramatic the change in comparison to the 80s. But if they keep doing what they're doing today, they're gonna be telling a similar story maybe 10 years from now. Okay, so let me go to my second part. That was a story. A great story, the story of a crisis that didn't happen. Let me go now to the second part that has to do with the lessons. So learning, I never thought that I was going to be able to say this. Learning from the development world and not because of what you did wrong but what you did right. Okay, so again, a little bit extra missed and you can give me a hard time after I finish during the conversation half an hour. But let me try to push the idea. What did we learn from the 2008 financial crisis? I mean, again, there are thousands of papers about that but let me summarize this in two lines. We learned something about the importance of resolution in the sense that if banks have problems, they must be able to exit so that the anti-exit important aspect of the market economy also works in the banking sector to provide the right incentives and so on. So resolution is a big thing today. The second thing is something related to the need of having this macro prudential view of the world. We cannot realize, I'm exaggerating, we cannot realize after 2008 that to look at each individual bank was not enough and that there was something that we call an endogenous risk and then, and again, this is the part that we could discuss but let me just follow. To some extent, you can read a lot of literature that claims that the corollary from the 2008 crisis in Europe and the US was the need of macro prudential policy. It's something that has been written today as we speak here. Well, let me try to go a little bit against the conventional wisdom. I'm not going to say that macro prudential policy are not important, far from that. Of course, I know it's important but let me just take everything to the extreme and mention something that I think we can learn from the experience in Latin America and let me use Chile in 2008. Let's see how important macro prudential policy, and to some extent, when you talk to people who are writing these papers, they tend to tell you that if they had had a good set of macro prudential policies, they would have not had the crisis they had and I don't agree with that. It's all I'm saying. I'm not saying it's not important. And just an example, by counterfactual, let's talk about Chile 2008. Believe me, Chile is not a preferred country. It's far from that. And this is the third part of my presentation. I'm going to mention a few of the challenges that we have and don't mind. However, you are in 2008 in Chile and I could say the same about Peru. Chile is an extreme in this version of this. There was no financial stability board. You know what I'm talking about, right? This thing that we create when we force the people from the governor from the central bank and the minister of the treasurer of Hacienda, as they call it in Latin America, and the banking regulator to meet together every month and so on, right? And to have this broad view, I think it's very important. I engaged in that in Chile and it was a wonderful experience. However, Chile didn't have anything close to that in 2008. We didn't have Basel III, of course not. It's 2010, but we didn't have Basel II either. Not at least the jury. No consolidated supervision until today. No information about economic groups that own a bank. We were far away from the recipe of the list of bullets related to what we learned from the 2008 crisis. However, even though we're so far away from that perfection, we also didn't have a super crisis. And I think the reason why we didn't have the super crisis is, in part, related to what I was saying before. We did the homework. And what do I mean by that? Let me just try to stress, because then we can use time to discuss because so I can finish. This is a paragraph. Taking, it's exactly as it was, it has quotation marks from a congressional research service report in the United States trying to teach the US what to learn from Chile. And I thought it was perfect because if you read it, I don't have time now, you're gonna find all the elements during the discussion today. But there's one that I want to stress in a few minutes. And it's a good way to summarize. Actually, this is something from WikiLeaks. So I don't even know if this is legal or not. Okay, but I know this is gonna stay here right and nobody's gonna. So maybe this, what we're doing is all right. Still, I took it from the internet. So this is a WikiLeaks document and it says things like, what did I emphasize there? I mean, you have time later to try to go through this by yourself. But the traditional concepts that are important today when you talk about financial crisis. Of course, solvency. So what did we do in Chile? We did something about solvency in 1983, 84. I'm gonna refer to that in one second. We restructured loans for all the borrowers, consumers, households, commercial loans. We restructured also the lenders. And we reorganized our balance sheets in order to make sure that they were basically giving the information that we're supposed to do in order to make sure that the payment system was still alive and the liquidity problem was not there and so on. This is described there, but some concepts that I want to emphasize. Solvency was there, liquidity was there. This is 1983, 84. Resolution is there, 1984, something that we're talking today. And then as a result of all these things, credibility. The system keeps operating. And then some interesting thing. I mean, you go and you repurchase the non-performing loans from the bank as a central bank, but then you force everybody to pay them back. And if you don't pay them back, you cannot distribute profits as banks. So you cannot give the right incentive in terms of moral hazard and you use the market to do that. Now, the cost was not cheap, 40% of GDP, but four years later in 1985, the financial system in Chile was back completely healthy. And you have the picture that I showed before. I don't have time now here, but I mean the kind of elements that were important and I already mentioned this. I have here, again as I said, it's a debt restructuring process with relief for both debtors and lenders. It's a restoring of the bank balance sheets with the recognition of long losses, but not forgiving them, just giving them time to come back. And it's a restructuring of the distressed banks with mergers, with sales, with liquidations and so on. Making sure that they were supposed to pay later, so the moral hazard problem is not there. And here are some of the elements that were part of the process. So at the end, and give me just four more minutes, Elena please. So the concept that I wanted to emphasize, the market was part of the story. The market played a role here. I'm gonna show a picture tomorrow when I talk about another country when I compare Chile and Mexico. Interest rate, very soon were already given signals, the right signal to the market. But at the same time, there was this hugely tightly regulation with a supervisor, very strict, with a lot of power to allow banks to do what they wanted them to do, actually to have simple banks. That has a cost, of course, it is a trade-off. And there was this institutional commitment to individual risk management, which is what I wanted to get to. You see, so what I'm telling you is a story that is in the first chapter of the first week of the first course of banking supervision. Basically, what they did here was to make sure that the banks in Latin America in 2008, to some extent, were doing their homework. They were doing the basic thing. Before talking about this complicated macro-potential set of tools that we need, of course, to be prepared the next time, we need to make sure that we're doing the basic job, which is to assess adequately individual risk of banks. As a matter of fact, I like the quote by Cristina Lagarde. At the end, all financial crisis, she says, are brought about by the same circumstances, easy money, slack regulation, and blue sky thinking. I want to emphasize the slack regulation and easy money part. I'm gonna jump, so one more slide. Now, what is my concern today? As a matter of fact, let me just mention one little thing. If you don't agree with me about the importance of doing the micro-prudential, micro-MI-prudential job, remember that for every financial institution that collapsed in 2008 and 2009, there was another one that emerged stronger than before. I could give you the least. I mean, we know Citibank, Burston, Lehman, Merrill Lynch, USB, AEG, all of them collapsed. However, we know that Goldman, Morgan Stanley, Deutsche Bank, Teddy Suisse, and MedLife, the equivalent to each one of them were stronger after the crisis than before. They did their job. So I want to stress that because I think that we tend to forget that. So my final slide. As a matter of fact, if you look at numbers related to leverage and capital adequacy in the developed world, the red dots, and in the emerging countries in Latin America, you can see that they were all more prepared. We can discuss this. So my final comment. What is the problem? And this is my last slide. The way Latin America, and because we don't have more time, I'm gonna need to concentrate in one concept. To some extent, my concern is that one, what we did in the late 80s and 90s that allow us to overcome the crisis in the early 80s and then to face the 2008 crisis in a strong way, I'm not so sure it's gonna be useful, one for the Latin American countries in the future. We start doing that when we were $5,000 per capita countries. Now we're $20,000 per capita country. There are issues related to consumer protection. There are issues related to competition. That to some extent, we're put aside. So sure, you take a picture of the banks in Chile and I'm making an extreme argument here. You have a few very large, very solvent, very boring in the good sense of the word, banks, that are very profitable and very able to face the worst of the crisis, but at the same time at the expense of having lower competition, of course, because you have a few banks that concentrate most of the market, which if you have a strong regulator may end up working fine, but it's every day is harder when you face new challenges related to new things that before you didn't need to solve, like the coordination with the consumer protection authority. And two, the fact, and I finish with this, that innovation has been every year showing us the possibility of new ways to create credit by companies that are in the cloud. They're very different from the banks that we know and there is an incentive from the regulator to not to allow that because you don't want to change what has worked, but at the same time we have a huge opportunity for financial inclusion at a lower cost to reach people who are living in the, if you think about India in places where you will never arrive as a huge bank with some romantic pillars, you know what I mean? Columns, but the regulator and those large banks at the end are best interest groups that are gonna block naturally maximizing the real problem, the emergence of the new companies with the excuse of say operational risk, just to finish. So that's something that I'm concerned that the recipe is gonna be useful for the future and I think that there is a huge challenge in that respect today, both for the developed countries to use this model and for developing countries to use it again. Thank you very much.