Although global current account imbalances have long been viewed as a major source of risk to the global economy, they have actually produced a global improvement in sovereign credit risk, says Moody’s Investors Service in a new report.

Acknowledging that global current account imbalances have continued to increase over recent years, prompting legitimate concerns that their resolution may not proceed in an orderly way, Moody’s new report argues that this has paradoxically resulted in the world sovereign risk constellation becoming more stable.

“The transformation of emerging market economies from importers into exporters of capital has resulted in improvements in their credit standing — with no negative impact on their growth performance,” says Pierre Cailleteau, chief international policy analyst at Moody’s and author of the report.

Moody’s points out that, at the time of the Louvre Accord in 1987 — when global imbalances were already perceived as a “serious economic and political risk” — the entire U.S. deficit was more than covered by Germany and Japan alone. At the same time, the rating agency argues, the credit profile of the main recipient of payments or importer of capital, the U.S., has not materially deteriorated.

“Some economies, like the U.S., Australia or Spain, have indeed reached a stage of economic development and financial maturity where balance of payment imbalances are more of a useful indicator of long-term economic vitality — and of an overextension of private sector balance sheets — than of sovereign financial risk,” explains Cailleteau.

“In fact, sovereign risk worries associated with current account imbalances are ultimately rooted in the idea of scarcity of foreign currencies and the predominant role of governments as intermediaries between domestic agents and international sources of financing,” says Cailleteau. Current account deficits are a concern when a country is indebted in foreign currencies, balance sheet foreign currency mismatches are significant, and there is a risk that a price adjustment may transform into a de facto shortage of external funds. According to Moody’s, the cause for concern is heightened when the country has a fixed exchange rate: under such conditions, national savings and domestic investment rates cannot afford to diverge too much for too long.

To the extent that the rating of the U.S. government is not threatened by this increase in the U.S. economy’s external financing needs and that, on the other hand, the ratings of most emerging market economies continue to benefit from a lowering of external vulnerabilities, Moody’s report concludes that this unusual pattern of global current and capital flows continues to generate a positive-sum game.