Liberalization and Regulation of International Capital Flows: Where the Opposites Meet
Abstract
The paper discusses the pros and cons of capital account liberalization. Rather than contrasting liberalization and regulation of capital flows as irreconcilable antagonisms, we argue that capital account liberalization requires institutional and regulatory safeguards. Even though the effectiveness of specific capital controls cannot be taken for granted, we reject the view that financial globalization has deprived national policymakers of the means to protect their economies against crisis. In addition to national safeguards, we assess the chances for crisis prevention and resolution on the regional level and present options to overcome institutional deficits on the global level. We conclude that reforms of the international financial architecture can help prevent illiquidity and ensure a fair burden sharing in the case of insolvency, without aggravating moral hazard behavior of the parties involved.Download Info
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Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1029.Length: 32 pages
Date of creation: Mar 2001
Date of revision:
Handle: RePEc:kie:kieliw:1029
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Related research
Keywords: Capital account liberalization; financial crises; financial regulation; international financial architecture.;Find related papers by JEL classification:
- F30 - International Economics - - International Finance - - - General
- G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
References
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Peter Nunnenkamp, 2001. "Too Much, Too Little, or Too Volatile? International Capital Flows to Developing Countries in the 1990s," Kiel Working Papers 1036, Kiel Institute for the World Economy.
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