Yet even for us, the composition of the inflows remains an issue. About three-quarters of the current account deficit since 2009 has been financed by volatile capital inflows. 9. At the same time, it must be acknowledged that QE2 has also had positive externalities. It seems to have improved confidence in the US economy, especially by putting an end to deflationary fears.
Their use to address financial instability could create uncertainty for pricing financial assets and result in a misallocation of capital, with consequences for the whole economy. There could also be a risk of a loss of credibility for the monetary authorities, as they pursue their mandate of price stability.