Increasingly-globalised and internationally-integrated financial markets, for example, if not sufficiently transparent, can at times be conducive to excessive risk-taking and contagion effects – a theme that rings particularly true in light of the current financial turmoil. •  Second, and more importantly, increasing global integration induces structural changes in goods markets and financial markets alike.
As a result, foreign shocks may have a greater impact on domestic inflation, and the transmission of other impulses to the euro area economy can change. This also applies to the impact of monetary policy on inflation. Let me briefly elaborate on how structural changes, which are driven by globalisation, can affect the process of inflation.