The corresponding depreciation in other countries' currencies will result in a gradual increase in the foreign currency price of U.S. exports, compared to the prices of foreign produced goods. The result is movements in relative prices that encourage imports and discourage exports.
However, recent developments have revealed several vulnerabilities in credit markets and allow us to reach some tentative conclusions. I should note that a number of these vulnerabilities and risks had been previously identified by the ECB, in its Financial Stability Review as well as by other central banks and international financial institutions. Some other vulnerabilities or structural weaknesses became visible during the recent developments.