Strong capital flows to emerging economies are natural and even desirable as these economies offer the highest perspective returns, but in many countries they continue to be exceeded by capital outflows into advanced-economy debt, especially into the US. Third, macroeconomic imbalances are increasing again after a temporary retrenchment during the crisis mainly due to a depressed demand in deficit countries.
They reflect a continuation of the unbalanced pattern of savings across the globe and make the international landscape much more vulnerable to the risks of sudden reversal in market sentiment and risk appetite and/or changes in the interest rate cycle. This situation of the international monetary system is bound to generate suboptimal outcomes and, especially, risks to the global financial stability.