, with the result that the recession was much more moderate than expected ; • it supported the work of the committee for the approval of bank transactions ; • it provided support to government operations, always in compliance with the treaty on the functioning of the european union, which, among other things, delineates the relations between national central banks and member states ’ governments. the bank holiday and the capital controls managed to contain the deposit outflows and the capital flight. the ensuing distortions in the capital market, as well as in the goods and services markets, have had indirect repercussions that cannot be precisely assessed as yet. on a positive note, however, capital controls have encouraged the use of electronic money. there is already strong evidence that the widespread use of e - money has supported private consumption and tax revenue, by reducing the informal economy. thus, one first policy implication is that the use of e - money needs to be strengthened further, through appropriate, mainly tax - related, incentives. a stronger banking system in the wake of recapitalisation the recapitalisation of greek banks was successfully completed in december 2015, with a substantial participation of private investors. this new recapitalisation became necessary against the background of a deteriorating economic climate, heightened uncertainty and increased outflows of deposits during the first half of 2015, as well as amid rising nonperforming loans. the four significant greek banks managed to cover the capital needs identified by the ecb ’ s stress tests. the necessary funds came from ( a ) foreign investors, who placed around €5. 3 billion ; ( b ) capital mitigating actions amounting to €0. 6 billion ; and ( c ) liability management exercises ( voluntary bond swap offers to bank bondholders ) that yielded about €2. 7 billion. for the two banks that did not fully cover their capital needs, based on the adverse scenario, from private sources ( totalling about €5. 4 billion ), the necessary additional funds were drawn from the hfsf. thus, the public resources used proved to be far lower than the amount of €25 billion foreseen by the eurogroup in august 2015. moreover, banks ’ reliance on ela has decreased, and the ceiling has been reduced by about €19. 0 billion since end - august. the lower ceiling reflects the improved liquidity situation of greek banks amid easing uncertainty and a stabilisation of private sector deposit flows, as well as, to a large extent

, macroprudential measures and, in some instances, even capital flow management measures5. these policies also come with their challenges and can have multilateral spillover effects on global economic and financial stability6. policy co - operation is thus an important complementary tool for capital flow management. multilateral co - operation can mitigate the cross - border effects of capital flows management measures and can provide economies with a useful framework for gradual capital flow liberalisation in line with their financial and institutional development. it is precisely in this way that the oecd code of liberalisation of capital movements makes its contribution. through the code, countries are provided guidance on the sequencing of liberalisation and the appropriateness of policy response to shocks. by fostering transparency, dialogue and accountability, adherence to the code ensures non - discriminatory treatment of countries, provides reassurance to markets as to the scope and duration of measures and catalyses policy support for reforms and adjustments. overall, the ever more interconnected international environment makes policy co - operation more necessary. to illustrate this point, i would like to draw on two examples : first, can coordination help moderate volatility in response to specific shocks, especially those emanating from global players? second, can it prevent the emergence of global imbalances? diverging monetary policies one pertinent example of the need for policy co - operation to avert large and volatile capital flows is in dealing with the effect of divergent monetary policies on global financial markets. it is broadly agreed that the impact of us monetary policy can have global repercussions, influencing exchange rates, risk premia and asset prices and causing valuation effects of us dollar - denominated liabilities. thus, changes of stance can be associated with significant capital flows especially to / from emerging market economies. the taper tantrum that affected global financial markets in 2013 is one example7. over the near future, it is widely expected that the us interest rate will be gradually raised, while those in the euro area and other advanced economies remain low. this divergence is likely to impact on global capital flows. uncertainty about the pace is judged to be a source of volatility in financial markets. thus, informal discussions between policy makers, if not closer co - operation, along with clear and coordinated communication and execution of policies, can be a useful tool for dampening volatility and preventing undue financial market turbulence. euro area imbalances my second example which supports the case