2019 ), op. cit. notes : capital flows are a four - quarters moving average of total “ gross capital inflows ” aggregated over 50 economies and reported as a percentage of total gdp. the global stock market factor is constructed from a dynamic factor model for stock returns in 63 countries. latest observation : q2 2018. the increase in international financial integration in recent decades has also been accompanied by the emergence of larger and more persistent external imbalances. this stands in contrast to the limited external imbalances observed in the 1960s and 1970s. while current account imbalances largely narrowed after the global financial crisis, a striking feature of the current configuration is that the euro area is running a substantial surplus, while the largest external deficit is run by the united states ( chart 8 ). chart 8 evolution of current account balances ( percentage shares of world gdp ) sources : imf world economic outlook and ecb staff calculations. chart 9 evolution of net international investment positions ( percentage shares of world gdp ) sources : imf international financial statistics and ecb staff calculations. in terms of external stock imbalances ( the difference between external assets and external liabilities ), net international investment positions remain substantial and have even widened in recent years ( chart 9 ). finally, the denomination of international trade in goods and assets is heavily concentrated in a small set of currencies : the us dollar has a predominant global role, with the euro the second - ranked global currency and especially important at the regional level ( chart 10 ). i will return to the some of the implications later, but a wider discussion of the international monetary system is beyond the scope of this lecture. chart 10 snapshot of the international monetary system ( percentages ) sources : bis, cls bank international, imf, swift and ecb calculations. see also ecb ( 2019 ). note : the latest data are for the fourth quarter of 2018 or the latest available. globalisation and monetary policy : conceptual issues there are several reasons why globalisation has important implications both for the transmission of shocks and the conduct of monetary policy. globalisation and domestic shocks while enhanced international risk - sharing should dampen the national impact of economic and financial shocks, the international mobility of factors of capital, labour, finance, firms and technologies can either amplify or dampen shocks. [ 14 ], [ 15 ] for instance, in relation to amplification, a boost to the domestic business environment can trigger a larger output response

vulnerable member states loans are still contracting compared to a year ago. but the pace of contraction has slowed considerably in these economies. this reflects both improved funding conditions for banks thanks to the tltros and app, and strengthening demand for loans amid an improving economic outlook and lower lending rates. loan supply can be expected to benefit further from the staggered impact of tltros. the app should also continue to support credit growth going forward. banks gain additional liquidity from the app either through selling marketable assets or through rising customer deposits, which they can in turn use for refinancing, purchasing assets or granting loans. in their responses to the october 2015 bank lending survey, most euro area banks indicated that they had used the additional liquidity from the app for the latter – granting loans ( about 30 % ) – and over the coming six months, this pattern can be expected to continue. banks also indicated a net easing impact from the app on their credit standards over the past six months ( loans to enterprises : – 4 %, housing loans : – 2 %, consumer credit and other lending to households : – 1 % ). and over the next six months, banks expect a continued easing impact on credit standards for loans to enterprises ( – 2 % ), while the effect on credit standards on housing loans and consumer credit is expected to remain broadly unchanged. altavilla c., g. carboni, r. motto ( 2015 ) asset purchase programmes and financial markets : lessons from the euro area, ecb working paper no. 1864. bis central bankers ’ speeches chart 1 use of additional liquidity and impact of the app on bank lending notes : the net percentages are defined as the difference between the sum of the percentages for “ tightened considerably ” and “ tightened somewhat ” and the sum of the percentages for “ eased somewhat ” and “ eased considerably ”. the results shown are calculated as a percentage of the number of banks which did not reply “ not applicable ”. bis central bankers ’ speeches the effects of app appear to be stronger still when looking at the impact on credit terms and conditions ( loans to enterprises : – 29 %, housing loans : – 13 %, consumer credit and other lending to households : – 22 % ; see chart 24b ), and the reported easing in terms and conditions for enterprises is generally larger than reported in the previous survey round. this favourable impact is also expected to continue over the next six months. one should keep in mind, however, that these