, the german economy is a net exporter of euro banknotes both to the rest of the euro area and non - euro area countries. according to our estimates, more than 40 % of the bundesbank ’ s cumulative net issuance leaves the euro area altogether. what are the main drivers behind this? conventional decompositions suggest that two channels are of particular importance : first, net shipments from international banknote wholesalers, and, second, tourists using banknotes to cover their travel expenses. however, with the increase in labour mobility, a third channel may have come to the fore which relates to the link between migration flows and remittances. there is evidence to suggest that, for example, estimates of the amount of us currency held abroad are affected by remittance flows. 2 workers base their individual decision to migrate on a simple cost - benefit analysis : the income benefits from migrating should outweigh the social and economic costs of moving. in the spirit of forward together, immigrants tend to use a portion of their income earned abroad to support their families at home. the value of remittances worldwide is on the rise. unlike foreign direct investment, these flows are driven less by risk and return but more by altruism and care for one other. remittance flows 2 / 3 bis central bankers'speeches are relatively resilient – at times even moving in a countercyclical manner. there are two views as to how remittance flows may also affect economic policies. on the one hand, as a driver of economic development, they may play an important role in reducing absolute poverty and income inequalities in the recipient country. on the other hand, there is the danger of excessively relying on remittance flows. there is evidence to suggest that incentives for structural reforms may weaken as a result. 3 from a payments point of view, remittances are cross - border p2p transactions. this implies that households need to have a reliable infrastructure at their disposal. in many cases, households will turn to non - cash systems. nevertheless, individual preferences and providers ’ transaction costs vary. cash does play a role in this too. informal cash transfers across borders could occur, for instance, when the receiving country is in close geographical proximity. but there are also several well - established formal channels. money transfer operators, for example, tend to accept physical cash payments by the sender, even if they then pass on the payment information in electronic form

in the balance sheet and changes in interest rates. uncertainties related to this relationship help to explain the fomc ’ s choice to make changes in overnight rates its main tool for adjusting the stance of monetary policy in the normalization process while balance sheet normalization runs in the background. still, having both instruments in the central bank ’ s toolkit raises the importance of clear and cohesive communications about their respective use. lesson 7 : operational flexibility is important as i noted earlier, the fed successfully adapted its operating regime to be able to control interest rates even with a large balance sheet. the fomc has not decided what kind of operating regime it wishes to run in the long run, but one lesson from the crisis is that not all operating frameworks may be robust to a wide range of circumstances, such as implementing policy at the zero lower bound. if one wished to retain the option that the balance sheet could be deployed as an active tool for policy implementation at this threshold and then gradually revert to a passive role when conditions normalize, then one needs to consider how to transition into and out of different operational modalities. this requires operational flexibility. a byproduct of a central bank ’ s portfolio - expanding asset purchase programs is an increased supply of reserve balances in the banking system. 43 thus, once balance sheet tools are deployed, the central bank will find itself operating in a system with reserve abundance if it wasn ’ t already, and will need to adopt instruments and arrangements that can deliver interest rate control accordingly. this imperative could imply switching operating regimes — from a corridor regime to a floor regime, or from a liability - driven floor to an asset - driven floor — and staying in the 8 / 13 bis central bankers'speeches new regime for an extended period. some central banks, such as the ecb, have monetary policy implementation frameworks in which this transition happens relatively seamlessly, while others, such as the fed before the crisis, required significant changes to tools and operations. timeliness of the transition is important, and overly complex transitions — especially if there is little time to prepare — could potentially restrain a central bank ’ s ability to respond aggressively to rapidly changing economic and financial conditions in a crisis. perhaps more importantly, delayed transitions could interfere with market expectations about any change in the policy stance, even though appropriately - calibrated expectations, through their effect on market pricing, could be stabilizing and lower the risk of a crisis. additionally, if a central