The Multilateral Aspects of Policies Affecting Capital Flows - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook The Multilateral Aspects of Policies Affecting Capital Flows write by International Monetary Fund. Monetary and Capital Markets Department. This book was released on 2011-10-13. The Multilateral Aspects of Policies Affecting Capital Flows available in PDF, EPUB and Kindle. The crisis is prompting a reconsideration of capital flows and the policies that affect them. A breakdown in the domestic stability of a large country can spill over into stress in other countries and even to the global system as a whole. The activities of global institutions and markets—some regulated and some not—can bear on the riskiness of flows. Thus, national policies affecting capital flows can transmit multilaterally. This transmission has not been fully appreciated by national policymakers. Further, they may not have incentives to take full account of the cross-border effects of their policies. Looking ahead, the upward trend in the volume of capital flows can be expected to continue, making it ever more important to address the associated cross-border risks. This paper aims to draw greater attention to the multilateral aspects of policies affecting capital flows. Previous work by the Fund has focused on the policies of recipient countries, mainly emerging market economies (EMEs), and addressed the circumstances in which capital flow management measures (CFMs) would be appropriate. This paper provides a complementary assessment of regulatory and supervisory policies of advanced economies, as well as large advanced economy monetary policy. Moreover, it addresses the multilateral transmission of CFMs.
The Multilateral Aspects of Policies Affecting Capital Flows - Background Paper
The Multilateral Aspects of Policies Affecting Capital Flows - Background Paper - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook The Multilateral Aspects of Policies Affecting Capital Flows - Background Paper write by International Monetary Fund. This book was released on 2011-10-24. The Multilateral Aspects of Policies Affecting Capital Flows - Background Paper available in PDF, EPUB and Kindle. The case studies document the regulatory and supervisory dimension of episodes during the recent crisis involving capital flows that generated systemic stress. Source country regulation and supervision is the main focus, although recipient country policies also were important in some cases and are thus covered as well. Three of the case studies are motivated by systemic stress that arose from flows between advanced economies. Strong demand by foreign investors for U.S. financial products helped drive gross flows between the United States and other countries, especially Europe, and induced the U.S. financial sector to develop products that transformed their risky assets into highly-rated securities. In turn, large European banks came to depend on short-term liquidity provided from the U.S. These two-way capital flows created a complex web among markets and institutions, some regulated and some not. Against this background, case studies were prepared for European banks and U.S. money market mutual funds (MMMFs) and for German banks and U.S. mortgage-backed securities (MBSs). Another important case is that of the near failure of the American International Group (AIG), which turned out to have complex and systemically cross-border linkages with other global institutions and markets.
The Multilateral Aspects of Policies Affecting Capital Flows
The Multilateral Aspects of Policies Affecting Capital Flows - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook The Multilateral Aspects of Policies Affecting Capital Flows write by Internationaler Währungsfonds. This book was released on 2011. The Multilateral Aspects of Policies Affecting Capital Flows available in PDF, EPUB and Kindle. The case studies document the regulatory and supervisory dimension of episodes during the recent crisis involving capital flows that generated systemic stress. Source country regulation and supervision is the main focus, although recipient country policies also were important in some cases and are thus covered as well. Three of the case studies are motivated by systemic stress that arose from flows between advanced economies. Strong demand by foreign investors for U.S. financial products helped drive gross flows between the United States and other countries, especially Europe, and induced the U.S. financial sector to develop products that transformed their risky assets into highly-rated securities. In turn, large European banks came to depend on short-term liquidity provided from the U.S. These two-way capital flows created a complex web among markets and institutions, some regulated and some not. Against this background, case studies were prepared for European banks and U.S. money market mutual funds (MMMFs) and for German banks and U.S. mortgage-backed securities (MBSs). Another important case is that of the near failure of the American International Group (AIG), which turned out to have complex and systemically cross-border linkages with other global institutions and markets.
Multilateral Aspects of Managing the Capital Account (EPub)
Multilateral Aspects of Managing the Capital Account (EPub) - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Multilateral Aspects of Managing the Capital Account (EPub) write by Mr. Jonathan David Ostry. This book was released on 2012-09-07. Multilateral Aspects of Managing the Capital Account (EPub) available in PDF, EPUB and Kindle. The financial crisis has again brought home the profound financial linkages across countries, often manifest in highly volatile capital flows. This volatility has prompted interest in possible rules of the road to guide policies in both source and recipient countries. This note discusses the analytical underpinnings, and possible contours, of such rules. While a series of discussion notes have investigated how an individual country might respond to surging inflows, less attention has been paid to the multilateral consequences of country policies, and the desirability of international cooperation to achieve globally efficient outcomes. We argue that the global welfare implications of capital account regulations, or policies that mimic the effects of such regulations, are threefold. First, spillovers from such policies do not necessarily have normative implications: if policies are justified from a national standpoint (in terms of reducing domestic distortions), under a range of conditions they should be pursued even if they give rise to cross-border spillovers. Second, however, if policies in one country exacerbate existing distortions in other countries, and it is costly for other countries to respond, then multilateral restrictions on unilateral policies are likely to be beneficial. Third, coordination may require borrowers to reduce inflow controls or, much thornier, agreement by source countries to partially internalize risks from excessively large or risky outflows. While it is very difficult to fully spell out desirable rules of the road in practice, multilateral oversight should carefully consider situations where capital account regulations seem unjustified from a prudential standpoint and seem instead geared toward vitiating external adjustment—e.g., when inflow controls are used to sustain an undervalued currency. Oversight might also raise red flags in situations where policies are excessively deflecting flows across recipient countries or transmitting risk from source to recipient countries. The discussion note fleshes out the analytical considerations behind such rules.
Liberalizing Capital Flows and Managing Outflows
Liberalizing Capital Flows and Managing Outflows - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Liberalizing Capital Flows and Managing Outflows write by International Monetary Fund. Monetary and Capital Markets Department. This book was released on 2012-03-13. Liberalizing Capital Flows and Managing Outflows available in PDF, EPUB and Kindle. This is the fourth in a series of Board papers developing a comprehensive Fund view on capital flows and the policies that affect them. A first paper in December 2010 dealt with the Fund’s overall role in this area, both historically and prospectively. The second paper in March 2011 developed a framework for policy advice on managing capital inflows broadly endorsed by the Board, which constitutes a first round articulation of the Fund’s institutional views on managing capital inflows. The third paper in November 2011 examined the multilateral aspects of policies affecting capital flows, and focused mainly on source country policies. This paper covers liberalizing capital flows and the management of outflows.
