scholarly journals Capital Flows, Capital Controls and Currency Crisis: The Case of Brazil in the Nineties

1999 ◽  
Author(s):  
Marcio G.P. Garcia ◽  
Marcus Vinicius F. Valpassos
Keyword(s):  
Capital Flows ◽  
Currency Crisis ◽  
Capital Controls

Iceland capital controls exit could set precedent

2016 ◽  
Keyword(s):  
Capital Flows ◽  
Currency Crisis ◽  
Capital Controls ◽  
International Markets ◽  
Content Type ◽  
Bank Resolution ◽  
The Stability ◽  
The Way

Significance The island is on track to start receiving early this year the 'stability contribution' that creditors of its three large failed banks have agreed to pay in return for regaining access to their assets, clearing the way for the -- probably gradual -- lifting of capital controls. Iceland could become an important international example of lifting capital controls without a fresh currency crisis, further public assumption of debt or litigation by creditors. Impacts If it persists, international markets' febrile state will make it especially hard to assess post-liberalisation risks for the krona. CBI rate rises are extra insurance against a post-liberalisation devaluation, but could complicate inflation and capital-flows policy. President Olafur Ragnar Grimsson will stand down after 20 years when his term ends in June, reinforcing the sense of an era ending. The January 1 entry into force of the euro-area's controversial new bank resolution regime will highlight Iceland's different path. Being one of the few states to prosecute and sentence bankers for their pre-crash actions will reinforce Iceland's distinctiveness.

Regulating Capital Flows: A Historical Perspective

2018 ◽  
Author(s):  
Atish R. Ghosh ◽  
Jonathan D. Ostry ◽  
Mahvash S. Qureshi
Keyword(s):  
Emerging Markets ◽  
Capital Flows ◽  
Historical Perspective ◽  
Financial Liberalization ◽  
Capital Controls ◽  
Authoritarian Regimes ◽  
Capital Inflows ◽  
Macroeconomic Policies ◽  
Advanced Economies ◽  
Guilt By Association

This chapter summarizes how thinking about capital flows and their management has evolved in both policymaking and academic circles. Many advanced economies used restrictions on capital inflows for prudential purposes—even as they pursued financial liberalization more broadly—until the 1980s, when capital account restrictions began to be swept away as part of broader liberalization efforts. Likewise, many emerging markets that had inflow controls for prudential reasons dismantled them when liberalizing domestic financial markets and controls over outflows. That the use of capital controls as a means of managing inflows is often viewed with suspicion may be partly a “guilt by association” with outflow controls and exchange restrictions. Historically, these have been more prevalent and more intensive, and their purpose has been to prop up authoritarian regimes or poor macroeconomic policies, often affecting both current and capital transactions.

Dynamics of capital controls: panel evidence from Asia

2020 ◽  
Vol 47 (2) ◽  
pp. 242-263
Author(s):  
Biplab Kumar Guru ◽  
Inder Sekhar Yadav
Keyword(s):  
Capital Flows ◽  
Capital Controls ◽  
Substitution Effect ◽  
Capital Flight ◽  
Empirical Examination ◽  
Content Type ◽  
Asian Economies ◽  
Asset Classes ◽  
The Impact ◽  
Gross Capital Flows

PurposeThis study empirically examines the effect of capital controls on the volume and composition of capital flows at aggregated as well as at disaggregated level by different asset classes such as debt, FDI, equity, and derivatives.Design/methodology/approachSeveral dynamic panel SYS-GMM models are employed on two sets of unique data on cross-border capital flows and capital control index along with control variables at aggregated and disaggregated level by different asset classes during 1995–2015 for a sample of 31 Asian economies.FindingsEconometric findings suggest that higher capital controls effectively reduce gross capital flows. The reduction in gross capital flows is largely found to be on account of effectiveness of controls on equity flows. However, the impact of controls on overall debt and derivative flows is found to be insignificant. Further, it was found that an increase in direct capital controls disaggregated by inflow and outflow categories significantly reduced the inflow of debt and equity + FDI flows and outflow of equity + FDI and derivative flows. Finally, the study did not find any substitution effect (due to indirect controls) and net effect on capital flows.Practical implicationsResults of such empirical examination may enable governments in respective countries to pursue prudent and rational capital controls as a shield against capital flight and shock transmission.Social implicationsPreventing capital flight through effective controls has macroeconomic benefits such as maintaining stability in income, growth, interest rate, exchange rate, and employment levels for the society.Originality/valueThe primary contribution of the study is the analysis of effectiveness of capital controls disaggregated by different asset categories such as debt, equity, FDI, and derivatives using two unique recent data sets for a large sample of Asian economies.

scholarly journals A comparative analysis of the financial liberalization in Turkey and Brazil

2020 ◽  
Vol 67 (2) ◽  
pp. 207-224
Author(s):  
Gover Tugrul
Keyword(s):  
Comparative Analysis ◽  
Capital Flows ◽  
Financial Integration ◽  
Financial Liberalization ◽  
Capital Controls ◽  
The Other ◽  
Capital Account ◽  
Other Hand ◽  
Capital Outflows ◽  
The One

The objective of this study is to explain the financial liberalization processes in Turkey and Brazil, to analyze the external financial liberalization processes and the financial integration indices and to compare the developments in the financial integration indices of Turkey and Brazil during the period 1980-2013. Our analysis revealed that, on the one hand, Brazil has continued its external liberalization process since the 1990s, but on the other hand, Brazil used two main tools to manage the capital flows, namely, capital controls and liberalization of capital outflows. In contrast, Turkey did not employ these tools following liberalization of the capital account.

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