In other words, the surplus countries have continued to accumulate net external assets, and the deficit countries net external debt – despite some emerging improvements over the current account imbalances in the euro area (Chart 3). I believe that this partly explains why the debtor peripheral countries currently find it difficult to resume adequate private-sector-based capital inflows despite their adjustment efforts.
We noted several challenges need to be address. First, with regards to BCBS review of the regulatory treatment of sovereign risk. We underline the need to undertake due consideration on the important role of sovereign debt in monetary operation, the financial market and economic development financing, especially in emerging economies.