Global monitoring of international capital flows

Increasing global capital flows are principally beneficial for the improved international allocation of capital, credit and risks, but this process is not without risks for global financial stability. Expanded global monitoring of international capital flows should deepen our knowledge of the underlying reasons for increasing capital flow volatility. As part of a system of global monitoring, the portfolio and rebalancing strategies of globally active banks and institutional investors could contribute signifi cantly to a better understanding of market dynamics, contagions, spillovers into the real economy and the vulnerabilities of countries.