NEWS Release - Monetary policy, exchange rates and capital flows - Speech by Benoît Cœuré, Member of the Executive Board of the ECB, at the 18th Jacques Polak Annual Research Conference hosted by the International Monetary Fund, Washington D.C., 3 November 2017
Central bank asset purchase programmes are often catalysts for significant cross-border capital flows. [1] By compressing the (excess) return on domestic bonds, they encourage investors to rebalance their portfolios towards foreign, higher yielding assets.[2]