The question, then, is whether the approaching end of net asset purchases in the euro area might see a sudden waning in the support for global bond yields, and thereby risk amplifying 2/7  BIS central bankers' speeches  prevailing upward pressure on global sovereign bond yields stemming from the ongoing tightening by the US Federal Reserve. If such adjustments were abrupt, they could risk causing broader capital reallocations, including from emerging market economies, and force a revaluation of global equity prices, with potentially adverse impacts on the financial conditions consistent with our primary mandate. The gradual decline in net capital outflows since their peak in the spring of 2016, which you can see in the chart on the left-hand side, would, at least at face value, nurture such concerns. It suggests that there is at most a loose correlation between the actual pace of Eurosystem purchases under the APP – which has been gradually declining since April last year – and the intensity of cross-border capital flows. The persistence of policy-induced cross-border capital flows The chart masks important differences across investors, however. You can see this more clearly on my next slide. Up until May this year, net capital outflows in debt securities have decelerated, by and large, as a result of a reduction in the pace of net sales by non-euro area residents – as you can see in the chart on the left-hand side.
In Hong Kong, the Gini coefficient has risen steadily from 0.476 in 1991 to 0.539 in 2016, whereas in the US, it has increased from 0.449 in 1991 to 0.519 in 2015.2 Economic inequality causes social divisions, with the rise in populism especially in the US and Europe being one of the unwelcome symptoms, and it also affects development and growth in the longer run. Indeed, problems with income and wealth disparity have become so acute that it has recently triggered a debate on the “crisis of capitalism”. IMF Managing Director Christine Lagarde, when presenting her Global Policy Agenda at the IMF Spring Meetings last month, also pointed out that the rewards of economic growth have not been shared, and called for a “new multilateralism” which will, among other things, foster inclusion. 4. With so much at stake, policymakers simply cannot brush aside the issue of the widening gap between the “haves” and the “have-nots”. Over the past two years, I have been talking about, on different occasions, how globalisation, technological innovation and monetary policy may have affected distribution of income and wealth. Today I wish to offer some further thoughts about the distributional consequences of monetary policies: what has happened so far, and the way forward for policymakers. The distributional effects of unconventional monetary policies 5.