. nevertheless, the currency depreciations have not been a unifying story in the developing world. in fact, according to the january 2014 world bank report, over 60 % of developing countries witnessed appreciation throughout the taper - talk period ( april – august 2013 ). 19 in many emerging countries, e. g. chile, malaysia, and mexico, the depreciations were much more pronounced. the diversity of responses to tapering across different countries, even those within the same geographic region, suggests that domestic factors are the key in amplifying or absorbing these foreign shocks. one clear aspect is the degree of leverage in the banking sector, which has been on the rise in many asian countries since early 2000s. 20 it remains a valid question whether and to what extent can the potential negative effects of tapering be spared. the way of implementing the tapering may play a role per se. there are two aspects of this problem. the first is the degree of commitment to policy announcements. 21 the second is the potential for policy synchronization and cooperation. the mandate of all major central banks is focused solely on domestic policy objectives. nevertheless, the interconnectedness of global financial markets means that domestic policy decisions which are harmful abroad may ultimately backfire at home. the financial crisis has proved that the interpretation of the legal mandate can be subject to some interpretation, depending on the severity of circumstances. it can also be noted that international coordination of monetary policies is not without precedent. one example is the plaza accord in 1985, a joint intervention to weaken the us dollar. also, in october 2008 four major central banks cut their key policy rates in a coordinated fashion. at this junction it is not clear if tapering is going to have clear negative effects in emerging economies. the world bank documents made negative forecast revisions of gdp growth internationally after may 2013. on the other hand, for financially stable economies, moderate calvo g., leiderman l., reinhart c. ( 1993 ), “ capital inflows and real exchange rate appreciation in latin america ”, international monetary fund staff papers, 40 : 1, march 1993. aizenman j., binici m., hutchison m. ( 2014 ), “ the transmission of federal reserve tapering news to emerging financial markets ”, nber working paper no. 19980, march 2014. eichengreen b., gupta p. ( 2013 ), “ tapering talk. the impact of expectations of

reduced federal reserve security purchases on emerging markets ”, mimeo, december 2013. world bank global economic prospects, january 2014. forbes k. ( 2014 ), “ capital flow volatility and contagion : a focus on asia ”, reserve bank of india – asian development bank volume on managing capital flows, forthcoming. woodford m., “ methods of policy accommodation at the interest - rate lower bound ”, paper presented at the jackson hole symposium, august 2012. bis central bankers ’ speeches depreciations may turn expansionary. 22 finally, unwinding unconventional monetary policy is ultimately a signal of us recovery and should therefore be interpreted as good news. another piece of good news might be that, at the end, the spillover effects of policies like qe seem to work through standard, well understood channels, i. e. through exchange rate movements and interest rate differentials. from this perspective it is hard to say what makes these unconventional policies distinct. 23 cespedes l., chang r., velasco a. ( 2004 ), “ balance sheets and exchange rate policy ”, american economic review, vol. 94, no. 4, september 2004. chinn m. ( 2014 ), “ global spillovers and domestic monetary policy. the effects of conventional and unconventional measures ”, paper prepared for the 12th bis annual conference “ navigating the great recession : what role for monetary policy? ”, 20 – 21 june 2013, luzern, switzerland. bis central bankers ’ speeches