Fifth, though these balances typically run off in February, higher refunds than allowed for by seasonal factors apparently offset the drag from tax payments. Sixth, mortgage refinancings have boosted M2 growth, as funds accumulate in transactions balances before being remitted to investors. Some or all of these effects can be quantified, though with considerable margin of error.
So let me conclude these remarks this morning with a few thoughts on the importance of international monetary arrangements to facilitate the reduction of imbalances. Most major industrialized countries and a large number of emerging market countries are operating with flexible exchange rates.