capital-controls

Today's system has no tie to gold or any other anchor, and contains a variety of exchange-rate regimes and capital controls.

Some have also experimented with limited capital controls in a parallel attempt to head off the flow of hot money.

Once it was accepted that the markets could set exchange rates, there was no real need for capital controls.

The fund's reconsideration of capital controls suggests that it is trying to adapt its advice to global economic realities.

"I would expect to see more calls for capital controls, " he said.

"The fact that they are having to escalate underlines the problems with direct measures like capital controls, " he said.

Another consequence of a system of floating exchange rates was that capital controls were not strictly necessary.

And yet it is the only major trading nation to use capital controls to prevent its currency rising to market levels.

Another risk for investors is if countries trying to prevent bubbles and curb inflows of "hot money" tighten capital controls.

Well, you could at least until Brazil put on capital controls limiting foreign inflows this week.

Even the International Monetary Fund, which has always been sceptical when it comes to capital controls, has been very quiet on this issue.

Meanwhile, Beijing still maintains capital controls that involve sterilizing the flow of money into the economy.

In at least two respects the new paper by Mr Ostry's team marks a further evolution of the fund's position on capital controls.

They are trying to control inflation by raising interest rates and using capital controls.

Yet the 1930s experience of capital controls, now back in vogue, suggests they are not always effective.

The IMF suggests that "capital controls may be the only instrument available to the authorities in the short term" .

To help them cope with inflows of money, emerging economies may introduce capital controls.

Again, there would be bank runs in Europe as depositors fled weaker countries, leading to the reintroduction of capital controls.

Even if China immediately scrapped capital controls the yuan would be unlikely to challenge the dollar as a reserve currency for years.

But that gap is still big enough to discourage a loosening of capital controls.

Capital controls prevent foreigners from acquiring renminbi; internationalisation encourages foreigners to hold them.

In contrast, the yuan remains subject to substantial capital controls and continues to be pegged against the US dollar.

It has already stepped back a little from its historical antipathy to capital controls.

Prior research has shown that the maturity structure of a country's external liabilities gets longer as a result of capital controls.

China's growth miracle features capital controls, artificially cheap loans to favoured companies and a managed exchange rate.

This makes them more like capital controls since most foreign-currency liabilities are likely to be owed to foreigners.

The only safe haven that will not do QE, put in capital controls, or complain about its strength is gold.

Some of the capital controls of this period were downright draconian in contrast with current practice.

Indeed, capital controls explain why share prices in Shanghai are so high: people have few other places to put their money.

Capital controls which prevent money from moving in an out of an economy easily consulate monetary policy to some extent.

In recent weeks and months, governments around the world were openly experimenting with capital controls to stem tides of speculative money.

Capital controls and even travel restrictions would be needed to stanch the bleeding of money from the economy.

Some countries, after intervening heavily to hold down the value of their currencies, threatened to adopt capital controls.

Malaysia's government imposed capital controls to stem an outflow of money from its stock market.

Stringent capital controls keep most Chinese currency in the country, leaving investors very few places to put their money.

He says that in conversations he and colleagues have with policy makers in Asia, capital controls are often a topic of interest.

A more flexible currency would not force China to abandon its capital controls.

China's capital controls and non-convertible currency make it difficult for Chinese individuals and companies to invest overseas.

It would require action including emergency support for the affected countries' banks and temporary capital controls.

But it also reiterated that some buildup of reserves or capital controls may be appropriate to address large and transitory movements.

In that case capital controls are a second-best way of managing the risks, and are economically justified.

Capital controls can be evaded by adjusting trade invoices: exporters can bring funds in secretly by over-invoicing for foreign sales.

Even the International Monetary Fund now reluctantly accepts that capital controls are a necessary weapon in the policy armoury.

In that context I think of capital controls as an effective but economically inefficient way of managing capital flow shocks.

Given capital controls, Chinese investors have no alternative if they want exposure to equities.

That leaves Beijing with fewer tools to engineer its take-off. Among those it has are capital controls and currency manipulation.

However, Mr Putin suggested that such efforts would stop short of full capital controls, which have been under discussion in policy circles.

The glacial pace of the relaxation of capital controls over the past 30 years is unlikely to be changed on the current premier's watch.

Already, some Asian governments are implementing limited capital controls in order to cope with a flood of money in search of higher yields.

China imposes extensive capital controls which prevent the free flow of renminbi between the Chinese mainland and elsewhere.

It has not followed countries from Brazil to Thailand by slapping on new capital controls.

China depresses the real exchange rate by using a set of fiscal policies and capital controls to generate an extremely high rate of savings.

South Korea has raised the prospect of introducing a new raft of capital controls as it wrestles with surging investment flows.

China's capital controls protect it, but the best global cure is not for China to take more funds, as many are now demanding.

As well as imposing capital controls, countries might retreat towards autarky, by raising retaliatory tariffs.

Investors are unable to arbitrage the difference between the onshore and offshore markets because of China's strict capital controls.

Emerging economies have denounced the money glut as currency warfare, and have fought back with capital controls.

However, significant capital controls were in place and allowed countries some policy autonomy.

This is because China retains extensive capital controls that limit the flow of renminbi between the onshore and offshore markets.

Full-blown capital controls are unlikely, though there is talk of a sovereign-wealth fund that could lean against currency appreciation.

In order to dodge capital controls and move money out of China, firms declare exports at less than their true value, or imports at more.

The economists are also candid about situations in which capital controls may be needed.

Until now, Beijing's capital controls have made it hard for Chinese business to invest overseas.

Officials say the need for capital controls has been amplified by talk of a fresh round of quantitative easing in the US.

But so far China capital controls have made the notion unworkable.

History has shown capital controls carry heavy long-term costs and should only be considered as instruments of last resort.

Capital controls should be part of their defences, too, against sudden floods of foreign cash.

Capital controls may at present place restrictions on the ability of offshore market participants to take either long or short positions.

A damaging age of capital controls seems likely.

Capital controls are the biggest structural impediment to closing the valuation gap .

First, some investors may be getting around China's capital controls by disguising investment flows as trade.

Or it is an enormous bubble, produced by capital controls and excess liquidity, that has massively inflated the value of mainland companies?

However companies and analysts were sceptical that the new capital controls would limit illegal capital flows.

Last week, Mr. Putin cited the government's rejection of capital controls as a sign of its commitment to keeping Russia's markets open.

That would result in capital controls and perhaps limits on bank withdrawals, which in turn would strangle commerce.

The only way it works is if every country is doing it, or with capital controls.

China's strict capital controls prevent private mainland companies from borrowing from foreigners directly.

That patchwork of international capital controls is "fragmenting the global capital market, " Mr. Stiglitz said.

Institutions and habits of thought changed, while capital controls and cold war rivalries reinforced reliance on foreign aid.

This ingenuity in circumventing capital controls has not gone unnoticed in Beijing.

These include direct intervention in the foreign exchange markets as well as capital controls.

However, capital controls tend to be ineffective and the market finds ways around them.

It also implemented capital controls and cut reserve requirements for banks' foreign currency liabilities.

Canada was different. Its long border, heavy trade and strong industry links with America made capital controls impractical.

The premiums stem from China's capital controls, which trap a lot of stock-investing liquidity within the Shanghai and Shenzhen markets.

Even with continuing, tight capital controls, there is no lack of foreign direct investments.

Capital controls on the mainland mandate that these private loans are denominated in foreign currency and reside offshore.

It is another to work out where it is going and how it gets past China's strict capital controls.

Chile was a poster child for capital controls a few years ago.

Instead it is managing the level of its currency, through capital controls and constant intervention on the foreign-exchange markets.

If the source of the foreign exchange is inward investors, not exporters, a country can impose capital controls to deter them.

Rising hot money inflows, which are largely a bet on renminbi appreciation, show that Beijing's capital controls are inadequate.

Progress had been made in simplifying the very complex web of capital controls and exchange rate restrictions imposed by many countries.

Taiwan and Thailand recently imposed capital controls on foreign investments in their bond markets.

Gradually relaxing capital controls is risky, but would give China's banks an incentive to reform their lending practices.

But its move could inspire other countries to follow suit and employ the ultimate option of capital controls.

Fearing a power grab, the prime minister, Mahathir Mohamad, sacked his uppity deputy and imposed capital controls.

They appeared partly aimed at soothing fears that loosened capital controls could leave China vulnerable.

But, given their risks and limited effects, a wide-scale return to capital controls is highly unlikely.

Indonesia's government relies heavily on foreigners to fund its deficit, so strict capital controls are unlikely.

It may thus make sense to treat such prudential measures and capital controls similarly.

The capital controls are steadily being dismantled, with deep implications both for the world economy and investors.

Spooked authorities in the likes of Brazil, South Korea and Indonesia have responded by imposing capital controls.

A chaotic Greek default would require capital controls to prevent the assets of the banking system disappearing overnight.

But China's capital controls and the absence of full renminbi convertability are likely to limit the impact.

but vested interests in the export sector will use the IMF's endorsement of capital controls to agitate against appreciation.

It introduced capital controls last month with a 2 per cent tax on foreign portfolio investments.

Currently, China uses rigorous capital controls to dissuade speculative flows.

But under- or overinvoicing of trade within international firms is also used to dodge capital controls.

And the problem is compounded by China's capital controls, which can cause domestic prices to differ greatly from those on other markets.

With capital controls blocking outflows, in theory the deposit base should remain fairly stable come what may.

Ms Forbes believes the main weakness of capital controls is that market participants usually find a way around the regulations.

Capital controls, and the prospect of policy tightening or even price controls, are making investors nervous.

Capital controls were lifted three decades ago and financial markets are highly integrated.

"But short-term capital controls may be necessary in some cases: it is a matter of balancing the costs of different options. "

Protectionism and capital controls remain a constant and probably rising threat.

Several experimented with capital controls to prevent destabilising upward pressure on exchange rates.

If an EM imposes capital controls to deal with asset bubbles, that's probably a good thing.

That, too, should support growth, although capital controls seem unavoidable in the near term.

China's strict capital controls mean overseas firms can't invest in the mainland's capital or financial markets.

Most Chinese households and companies find it difficult to move funds abroad given capital controls.

Capital controls were put in place to pursue monetary policy under more flexible exchange rates.

But the best example of the IMF's incoherence is its U-turn on capital controls.

Other nations will take countermeasures by putting in place capital controls.

Latin America, particularly Chile and Colombia, has a history of using capital controls.

Fears of capital flight are one factor that keeps Beijing from lifting capital controls.

Some overseas funds also bar investment in countries with capital controls.

It would also need to impose capital controls, in violation of treaty obligations.

Despite capital controls, it is increasingly easy for rich Chinese to move money offshore.

But the old consensus against capital controls was not mere dogma.

In some circumstances, capital controls may be justified if they keep the currency cheap and promote growth.

And countries can simply decide capital controls are now OK in their rule-book.

For years, the IMF opposed capital controls, but that view recently changed.

In the short term, that could prompt a fresh round of intervention and capital controls.

It is unable to refinance loans because the new capital controls mean all credit to the country has dried up.

Pessimistic types painted a dark future of trade wars and capital controls.

The IMF has said capital controls and industrial policy might work, after all.

Some analysts say the government could impose capital controls, which would limit money from leaving Russia, to ease pressure on the ruble.

Capital controls also compromise prosperity by misallocating a country's wealth.

This requires easing capital controls that currently make it hard for businesses to use yuan anywhere but in China.

What about imposing capital controls to head off possible bank runs?

The government was forced to introduce capital controls and suspend gold payments, in effect unpegging its currency.

Capital controls are not a new policy measure, of course.

"I'm not against capital controls, but if you put them in and they don't work, you have to keep going further. "

Capital controls limit capital flight.

Capital controls could yet make a comeback.

The PPP's campaign promises included removing capital controls that were imposed in late 2006.

And other investors are livid too, not least those with funds still trapped in the country by capital controls.

At a time when more and more nations are resorting to capital controls and currency intervention, India shows there is another way.

Bringing the $40, 000 grant into India also proved complicated, given New Delhi's then strict capital controls.

The same argument could apply to capital controls now.

The first reversal, on inflation targets, makes less sense than the second, on capital controls.

Capital controls stop money going abroad; bank deposits are unattractive because of low interest rates.

A big question is whether capital controls on interest rates after the return to more normal levels are canceled.

But strict Chinese capital controls have limited the scope for foreign governments to invest in China's financial products.

In the past, capital controls often smacked of desperation.

While capital controls could be part of the cure in Switzerland, in China they are part of the illness.

They could peg the currency with capital controls.

Even if capital controls were brought in, some Greek banks would go bust.

As with capital controls, this is part of the financial model.

The exchange-rate and capital controls of the Bretton Woods financial system kept savers from seeking high returns abroad.

The government already has in place strict capital controls.

Foreign participation in China's stock markets is limited by the country's capital controls.

Mr Uribe is less convinced that capital controls can do much to affect the exchange rate.

Holz said it could take 10 to 15 years for China to remove its capital controls.

Capital controls could square the circle, but these are never watertight.

There were too many problems such as capital controls and foreign exchange.

Some, such as Brazil, have introduced capital controls and taxes to prevent overheating.

The Bretton Woods system had strict capital controls, designed to protect the exchange-rate pegs.

They do not want to impose new capital controls, because they know that these leak and are a nightmare to administer.

"Despite capital controls in China, it is already happening. "

Capital controls, I think, are something that is fading.

Capital controls, for example, may have little effect.

This is directly relevant to China and to other developing countries that are growing rapidly but maintain capital controls.

Shanghai's hours are as short as Hong Kong's but capital controls help insulate China's bourses from global competition.

Despite strict capital controls, China is being flooded by the biggest wave of speculative capital ever to hit an emerging economy

China's capital controls The more special economic zone The landscape of capital-account liberalisation

A disjointed attempt by the IMF to refine its thinking on capital controls

Partial easing of capital controls

Capital controls in Cyprus a first for EU

It is far easier to ride currency appreciation in markets where capital controls are loose, or even non-existent, than in China

Capital Flight And Capital Controls In Developing Countries