has been the implications of prospective us monetary normalisation. the announcement by the us about tapering about a year ago prompted sharp currency falls and asset price declines in several emerging markets. further bouts of market volatility have been observed since then, including in january and february this year. the episode has renewed debate about the spillover effects of monetary policies in advanced economies. there is no academic consensual view about the causes of capital flows. in - depth studies show that perceptions of global and relative risks, accompanied by mere volatility of capital markets associated with uncertainty, provide better explanations than monetary policy effects. 1 nevertheless, spillovers are an unavoidable aspect of financial integration and the negative aspects of monetary normalisation in the us should not be helene rey ( 2013 ) “ dilemma not trilemma : the global financial cycle and monetary policy independence ”, jackson hole, kansas fed conference. bis central bankers ’ speeches overstated. we forget too easily that accommodative monetary policy has had positive spillovers since the start of the financial crisis. the gradual exit from unconventional policies in the us reflects the welcome recovery of a key pillar support for the global growth. clearly, policymakers in advanced economies should not be exempt from the responsibility to tread with care. in particular, clear and credible communication by central banks is important to minimise uncertainty and negative spillover effects from exiting unconventional monetary policy. international cooperation in an era of globalisation can provide significant gains. i agree with raghuram rajan when he highlights that global welfare does not depend only of domestic optimization of policies, important as they are. emerging markets should also accept more flexibility in their exchange rates. the fact that in the second round of instability the countries with imbalances were the ones that suffered most, suggests that sound domestic policies are a crucial buffer to minimise adverse spillovers. but i would also emphasise that the international community – mainly the imf – must provide help in the form of improved liquidity facilities that reduce the incentive to build up excessive reserves and can be activated without stigma. the structural slowdown in emerging markets a second global theme has been the remarkable moderation of growth in emerging markets. to take just one statistic, aggregate emerging market growth has slowed sharply in recent years, from just under 8 % in 2010 to around 4. 5 % last year. one component of this slowdown has been a structural moderation. in retrospect, the early part of this century

believe authorities did their utmost in their response to the crisis at the beginning, given the challenges at that point in time. but it got worse, far worse, and new, more drastic measures were needed. that doesn ’ t prove that initial policies and measures were wrong. rather, it illustrates the determination of authorities to fight this crisis. but it also shows something else, that fighting this crisis demands international coordination. at best, uncoordinated nationally implemented measures may be effective in solving national problems. but a number of those measures unintentionally triggered problems in other countries. the chain effect of raising the deposit guarantee scheme protection is a clear example. the introduction of higher levels of depositor protection triggered a flow of savings out of other countries, forcing other governments to implement similar policies. coordination could have prevented negative side effects. many of the policies implemented to fight this crisis carry the risk of economic nationalism. uncoordinated national policies fail to take into account the complexity of the financial system. the interconnectedness of the financial world should have made it utterly unthinkable to act unilaterally. this does not just apply to measures targeting the soundness of financial institutions. in our integrated world any uncoordinated policy aiming to boost the economy, might cause negative externalities. however unintentionally, uncoordinated measures could spark a period of real protectionism. the net effect of such “ beggar - thyneighbour ” policies is a deepening crisis. supranational authorities could and should play a bigger role. enhanced coordination is not limited to governments, regulators or supervisors. during the financial crisis we saw several cases, most notably the collapse of lehman brothers in september 2008, which had a truly systemic impact. these events have demonstrated that the distinction between macro - and microprudential stability is hypothetical in practice. both are necessary. therefore there is an urgent need for close and continuous cooperation between macroprudential supervisors – central banks – and microprudential supervisors. to be frank, i don ’ t think the crisis is anywhere near its end. but i do think it is time to consider what shape an end to the crisis would take. fighting this crisis has been tough. reversing the implemented measures will require exactly the same coordination and determination. and reversing those policies isn ’ t going to be easy. the same national interests that drove the uncoordinated remedies to fight this crisis