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Capital-Account and Counter-Cyclical Prudential Regulations in Developing Countries

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  • Ocampo, Jose Antonio

Abstract

Abstract This paper explores the complementary use of two instruments to manage capital-account volatility in developing countries: capital account regulations and counter-cyclical prudential regulation of domestic financial intermediaries. Capital-account regulations can provide useful instruments in terms of both improving debt profiles and facilitating the adoption of (possibly temporary); counter-cyclical macroeconomic policies. Prudential regulation and supervision should take into account not only the microeconomic risks, but also the macroeconomic risks associated with boom-bust cycles. It should thus introduce counter-cyclical elements into prudential regulation and supervision, together with strict rules to prevent currency mismatches and reduce maturity mismatches. These instruments should be seen as a complement to counter-cyclical macroeconomic policies and, certainly, neither of them can nullify the risks that pro-cyclical macroeconomic policies may generate.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

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  • Ocampo, Jose Antonio, 2002. "Capital-Account and Counter-Cyclical Prudential Regulations in Developing Countries," WIDER Working Paper Series 082, World Institute for Development Economic Research (UNU-WIDER).
  • Handle: RePEc:unu:wpaper:dp2002-82
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    Cited by:

    1. Yeldan Erinc A., 2008. "Prospects for Inflation Targeting in the MENA Region: Feasibility, Desirability and Alternatives," Review of Middle East Economics and Finance, De Gruyter, vol. 4(3), pages 83-100, September.
    2. Rapetti Martin, 2013. "Macroeconomic Policy Coordination in a Competitive Real Exchange Rate Strategy for Development," Journal of Globalization and Development, De Gruyter, vol. 3(2), pages 1-31, March.
    3. repec:idb:idbbks:349 is not listed on IDEAS
    4. repec:ilo:ilowps:487892 is not listed on IDEAS
    5. K.S. Jomo & Ilene Grabel & Gerald Epstein, 2003. "Capital Management Techniques In Developing Countries: An Assessment of Experiences From the 1990s and Lessons for the Future," Working Papers wp56, Political Economy Research Institute, University of Massachusetts at Amherst.
    6. James Heintz & Gerald Epstein, 2006. "Monetary Policy and Financial Sector Reform For Employment Creation and Poverty Reduction in Ghana," Working Papers wp113, Political Economy Research Institute, University of Massachusetts at Amherst.
    7. Roberto FRENKEL, 2003. "Globalization and financial crises in Latin America," Iktisat Isletme ve Finans, Bilgesel Yayincilik, vol. 18(207), pages 41-56.
    8. Gerald Epstein & Erinc Yeldan, 2008. "Inflation targeting, employment creation and economic development: assessing the impacts and policy alternatives," International Review of Applied Economics, Taylor & Francis Journals, vol. 22(2), pages 131-144.
    9. Augusto de la Torre & Sergio Schmukler, 2007. "Emerging Capital Markets and Globalization: The Latin American Experience," IDB Publications (Books), Inter-American Development Bank, number 349, April.
    10. Yýlmaz Akyüz, "undated". "Global Rules and Markets: Constraints over Policy Autonomy in Developing Countries," Working Papers 2007/5, Turkish Economic Association.
    11. Augusto De La Torre & Sergio L. Schmukler, 2004. "Whither Latin American Capital Markets?," World Bank Publications, The World Bank, number 25933, July.
    12. Epstein, Gerald., 2015. "Development central banking : a review of issues and experiences," ILO Working Papers 994881283402676, International Labour Organization.
    13. Ilene Grabel, 2005. "Taxation of International Private Capital Flows and Securities Transactions in Developing Countries: Do Public Finance Considerations Augment the Macroeconomic Dividends?," International Review of Applied Economics, Taylor & Francis Journals, vol. 19(4), pages 477-497.
    14. Gerald Epstein, 2007. "Central banks as agents of employment creation," Working Papers 38, United Nations, Department of Economics and Social Affairs.
    15. de la Torre, Augusto & Gozzi, Juan Carlos & Schmukler, Sergio L., 2006. "Financial development in Latin America : big emerging issues, limited policy answers," Policy Research Working Paper Series 3963, The World Bank.
    16. Augusto de la Torre & Sergio L. Schmukler, 2007. "Emerging Capital Markets and Globalization : The Latin American Experience," World Bank Publications, The World Bank, number 7187, September.
    17. Khou, Vouthy. & Cheng, Oudom. & Leng, Soklong. & Meng, Channarith., 2015. "Role of the Central Bank in supporting economic diversification and productive employment in Cambodia," ILO Working Papers 994878923402676, International Labour Organization.
    18. Gerald Epstein & James Heintz, 2006. "Monetary Policy and Financial Sector Reform for Employment Creation and Poverty Reduction in Ghana," Country Study 2, International Policy Centre for Inclusive Growth.
    19. Yeldan, Erinc., 2011. "Macroeconomics of growth and employment : the case of Turkey," ILO Working Papers 994674263402676, International Labour Organization.

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