That is to say, global (bank and non-bank) investors have taken risks in those currencies, but their liabilities continue to be mostly denominated in dollars. This usually causes considerable exchange rate fluctuation regardless of the local macroeconomic conditions, and leads to harder structural limits imposed by a shortage of foreign currency, with negative consequences on long-term growth.
For instance, in the current environment of global slack, the international spillovers from growth-friendly fiscal policies are likely to be wholly positive, since they primarily boost domestic demand in the home country. That is also true within regions, such as the euro area, where there are different local output gaps.