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The European Central Bank (ECB) Vice President Vitor Constancio said in a speech in Hong Kong on Thursday that the exit from the zero interest rate policy may have spillover on other countries in the short terms.
"We live in an increasingly globalised world. The responsiveness of financial markets to monetary policy announcements is prima facie evidence that the exit from the zero lower bound may have potent spillovers on other countries in the short run. The medium-term impact of monetary policy spillovers is however much less clear-cut than frequently assumed in policy debates," he said.
Constancio added that the spillover from US monetary policy is larger than those from the Eurozone, due to "the dominance of the US dollar in global financial markets".
"Global challenges require both domestic and global responses to ensure that the global financial system becomes more resilient," he concluded.
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