Capital Flows Review Of Experience With The Institutional View
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Capital Flows - Review of Experience with the Institutional View by International Monetary Fund. Legal Dept.,International Monetary Fund. Monetary and Capital Markets Department,International Monetary Fund. Research Dept.,International Monetary Fund. Strategy, Policy, & Review Department,International Monetary Fund. Fiscal Affairs Dept.,International Monetary Fund. Statistics Dept. Pdf
Capital flows are an important aspect of the international monetary system. They provide significant benefits, both direct and indirect. At the same time, they also carry risks, and a key challenge for countries is how to harness the benefits while managing the risks. The institutional view on the liberalization and management of capital flows provides the Fund with a basis for consistent advice on policies related to capital flows. This paper reviews countries’ experiences with handling capital flows in the period since the adoption of the IMF’s institutional view in 2012. Based on the experience, it identifies a few areas in which the view would benefit from further clarification or elaboration.
Review of The Institutional View on The Liberalization and Management of Capital Flows — Background Note on Capital Flows and Capital Flow Management Measures — Benefits and Costs by Gurnain Kaur Pasricha,Erlend Nier Pdf
The Fund’s Institutional View (IV) recognizes the benefits of and risks associated with capital flows. Since the IV was adopted, a growing literature has provided additional insights into the benefits and risks from capital flows. This note summarizes the insights from the recent literature and the experiences of staff since the adoption of the IV that have informed this review.
Author : International Monetary Fund Publisher : International Monetary Fund Page : 98 pages File Size : 49,7 Mb Release : 2022-03-30 Category : Business & Economics ISBN : 9798400204593
Review of The Institutional View on The Liberalization and Management of Capital Flows by International Monetary Fund Pdf
The Institutional View (IV) on the Liberalization and Management of Capital Flows, adopted in 2012, provides the basis for consistent advice, and where relevant, assessments on policies related to capital flows. This paper reviews the IV, informed by advances in research, notably the work on an Integrated Policy Framework (IPF), the findings of the 2020 evaluation by the Independent Evaluation Office (IEO) on IMF Advice on Capital Flows, and staff’s experience with the implementation of the IV. The core premises and objectives of the IV remain unchanged. The IV rests on the premises that capital flows are desirable as they can bring substantial benefits for countries, and that capital flow management measures (CFMs) can be useful in certain circumstances but should not substitute for warranted macroeconomic adjustment. With those premises in mind, the IV aims to help countries reap the benefits of capital flows, while managing the associated risks in a way that preserves macroeconomic and financial stability and does not generate significant negative outward spillovers.
International Monetary Fund. Strategy, Policy, & Review Department,International Monetary Fund. Legal Dept.,International Monetary Fund. Monetary and Capital Markets Department
Author : International Monetary Fund. Strategy, Policy, & Review Department,International Monetary Fund. Legal Dept.,International Monetary Fund. Monetary and Capital Markets Department Publisher : International Monetary Fund Page : 49 pages File Size : 52,5 Mb Release : 2012-04-11 Category : Business & Economics ISBN : 9781498339612
The Liberalization and Management of Capital Flows - An Institutional View by International Monetary Fund. Strategy, Policy, & Review Department,International Monetary Fund. Legal Dept.,International Monetary Fund. Monetary and Capital Markets Department Pdf
Capital flows have increased significantly in recent years and are a key aspect of the global monetary system. They offer potential benefits to countries, but their size and volatility can also pose policy challenges. The Fund needs to be in a position to provide clear and consistent advice with respect to capital flows and policies related to them. In 2011, the International Monetary and Financial Committee (IMFC) called for ?further work on a comprehensive, flexible, and balanced approach for the management of capital flows.? This paper proposes an institutional view to underpin this approach, drawing on earlier Fund policy papers, analytical work, and Board discussions on capital flows.
Review of The Institutional View on The Liberalization and Management of Capital Flows — Background Note on Using the IPF Analytical Toolkit to Enhance Policy Assessments by Marcin Kolasa,Gurnain Kaur Pasricha,Mr. Suman S Basu,Ms. Emine Boz,Dimitre Milkov Pdf
Insights from the IPF workstream can help guide the appropriate policy mix during an inflow surge, based on the shock and country characteristics. Inflow surges may be caused by a range of shocks and can take different forms in different countries. The IPF models suggest that warranted macroeconomic policy adjustments depend on the nature of the shock and country characteristics. The IPF models point to shocks and country characteristics that make it difficult to effectively respond to surges using only macroeconomic policy and exchange rate adjustment. The IPF models also suggest that, in the presence of overheating and overvaluation, the use of FXI and CFMs can enhance monetary autonomy in certain circumstances without generating other distortions. The relative costs and benefits of FXI and CFMs depend on country-specific factors. The IPF models also illustrate how surges can lead to a build-up of systemic financial risks. The IPF workstream connects the appropriate mix of MPMs and CFM/MPMs to the structure of the country's financial system.
Review of The Institutional View on The Liberalization and Management of Capital Flows — Background Note on Principles for the Design of Measures to Address Systemic Risks from FX Mismatches by Mr. Heedon Kang,Mr. Paavo A Miettinen,Erlend Nier,Mr. Thorvardur Tjoervi Olafsson,Gurnain Kaur Pasricha Pdf
This note describes the key principles for the design and implementation of preemptive CFM/MPMs. These measures should be designed to be effective—so they achieve their intended goal and are not easily circumvented—and efficient—so they minimize distortions and costs. Preemptive CFM/MPMs should be targeted, calibrated to risks, transparent, and as temporary as possible. The appropriate design depends on country circumstances, such as institutional and legal constraints, as well as the precise source of the vulnerability. Where measures that do not discriminate by residency are available and effective, they should be preferred.
Author : International Monetary Fund Publisher : International Monetary Fund Page : 18 pages File Size : 47,5 Mb Release : 2022-03-30 Category : Business & Economics ISBN : 9798400206016
Review of The Institutional View on The Liberalization and Management of Capital Flows — Background Note on Assessing Systemic Financial Stability Risks Due to FX Mismatches by International Monetary Fund Pdf
This note outlines the approach of the proposed revision to the Institutional View (IV) when assessing whether systemic financial stability risks are elevated due to foreign currency (FX) mismatches. The approach builds on the staff guidance regarding risk assessments in bilateral surveillance, while allowing for flexibility to draw on future advances in best practice. This note proposes a two-step approach to assess systemic risks from FX mismatches. This note is organized as follows. Section II outlines the sources of systemic risks stemming from FX debt and potential amplification channels. Section III outlines the risk assessment approach in practice and Section IV concludes.
Capital Flow Management Measures in the Digital Age by Mr. Dong He,Annamaria Kokenyne,Xavier Lavayssière,Ms. Inutu Lukonga,Nadine Schwarz,Nobuyasu Sugimoto,Jeanne Verrier Pdf
Capital flow management measures (CFMs) can be part of the broader policy toolkit to help countries reap the benefits of capital flows while managing the associated risks. Their implementation typically requires that financial intermediaries verify the nature of transactions and the identities of transacting parties but is facing the rising challenge of crypto assets. Indeed, crypto assets have become a significant instrument for payments and speculative investments in some countries. They can be traded pseudonymously and held without identification of the residency of the asset holder. Many crypto service providers operate across borders, making supervision and enforcement by national authorities more difficult. The challenges posed by the attributes of crypto assets are compounded by gaps in the legal and regulatory frameworks. This paper aims to discuss how crypto assets could impact the effectiveness of CFMs from a structural and longer-term perspective. To preserve the effectiveness of CFMs against crypto-related challenges, policymakers need to consider a multifaceted strategy whose essential elements include clarifying the legal status of crypto assets and ensuring that CFM laws and regulations cover them; devising a comprehensive, consistent, and coordinated regulatory approach to crypto assets and applying it effectively to CFMs; establishing international collaborative arrangements for supervision of crypto assets; addressing data gaps and leveraging technology (regtech and suptech) to create anomaly-detection models and red-flag indicators that will allow for timely risk monitoring and CFM implementation.
Monetary Stability as a Common Concern in International Law by Lucía Satragno Pdf
The open access publication of this book has been published with the support of the Swiss National Science Foundation. In Monetary Stability as a Common Concern in International Law, Lucía Satragno argues that monetary stability is a global public good that must be promoted and protected at all levels of governance. In doing so, the book accomplishes two tasks. On one hand, it provides an up to date analysis of the role of law and institutions in the international monetary field since the collapse of the Bretton Woods system. On the other hand, it applies the methodological approach proposed by the novel doctrine of Common Concern of Humankind to monetary stability as a case study. Accordingly, the book examines not only the status quo of the international monetary system, but also looks at the ‘new and different realism’ that would be envisaged in monetary affairs in the case of a fully-fledged principle of Common Concern.
Selected Decisions and Selected Documents of the International Monetary Fund by International Monetary Fund. Legal Dept. Pdf
This volume is the Forty-Third Issue of Selected Decisions and Selected Documents of the International Monetary Fund. It includes decisions, interpretations, and resolutions of the Executive Board and the Board of Governors of the International Monetary Fund, as well as selected documents, to which frequent reference is made in the current activities of the Fund. In addition, it includes certain documents relating to the Fund, the United Nations, and other international organizations.
Selected Decisions and Selected Documents of the International Monetary Fund, 42nd Issue by International Monetary Fund. Legal Dept. Pdf
This volume documents decisions, interpretations, and resolutions of the Executive Board and Board of Governors of the International Monetary Fund, as well as documents relating to the United Nations and other international organizations.
Selected Decisions and Selected Documents of the International Monetary Fund, Forty First Issue Supplement by International Monetary Fund. Legal Dept. Pdf
This volume is the Forty-First Issue of Selected Decisions and Selected Documents of the IMF. It includes decisions, interpretations, and resolutions of the Executive Board and the Board of Governors of the IMF, as well as selected documents, to which frequent reference is made in the current activities of the IMF. In addition, it includes certain documents relating to the IMF, the United Nations, and other international organizations. As with other recent issues, the number of decisions in force continues to increase, with the decision format tending to be longer given the use of summings up in lieu of formal decisions. Accordingly, it has become necessary to delete certain decisions that were included in earlier issues, that is, those that only completed or called for reviews of decisions, those that lapsed, and those that were superseded by more recent decisions. Wherever reference is made in these decisions and documents to a provision of the IMF’s Articles of Agreement or Rules and Regulations that has subsequently been renumbered by, or because of, the Second Amendment of the Fund’s Articles of Agreement (effective April 1, 1978), the corresponding provision currently in effect is cited in a footnote.
Selected Decisions and Selected Documents of the International Monetary Fund, Fortieth Issue by International Monetary Fund. Legal Dept. Pdf
This volume is the Fortieth Issue of Selected Decisions and Selected Documents of the IMF. It includes decisions, interpretations, and resolutions of the Executive Board and the Board of Governors of the IMF, as well as selected documents, to which frequent reference is made in the current activities of the IMF. In addition, it includes certain documents relating to the IMF, the United Nations, and other international organizations. As with other recent issues, the number of decisions in force continues to increase, with the decision format tending to be longer given the use of summings up in lieu of formal decisions. Accordingly, it has become necessary to delete certain decisions that were included in earlier issues, that is, those that only completed or called for reviews of decisions, those that lapsed, and those that were superseded by more recent decisions. Wherever reference is made in these decisions and documents to a provision of the IMF’s Articles of Agreement or Rules and Regulations that has subsequently been renumbered by, or because of, the Second Amendment of the Fund’s Articles of Agreement (effective April 1, 1978), the corresponding provision currently in effect is cited in a footnote.
Author : International Monetary Fund Publisher : International Monetary Fund Page : 114 pages File Size : 41,5 Mb Release : 2017-10-05 Category : Business & Economics ISBN : 9781475563252
International Monetary Fund Annual Report 2017 by International Monetary Fund Pdf
During the past financial year, the IMF’s 189 member countries faced a number of pressing challenges. IMF work on these challenges - slower trade, declining productivity, gender inequality, inclusive growth, and debt management - is a central focus of this 2017 Annual Report.
International Monetary Fund. Strategy, Policy, & Review Department,International Monetary Fund. Legal Dept.,International Monetary Fund. Monetary and Capital Markets Department
Author : International Monetary Fund. Strategy, Policy, & Review Department,International Monetary Fund. Legal Dept.,International Monetary Fund. Monetary and Capital Markets Department Publisher : International Monetary Fund Page : 49 pages File Size : 51,7 Mb Release : 2017-05-07 Category : Business & Economics ISBN : 9781498346696
Increasing Resilience to Large and Volatile Capital Flows—The Role of Macroprudential Policies by International Monetary Fund. Strategy, Policy, & Review Department,International Monetary Fund. Legal Dept.,International Monetary Fund. Monetary and Capital Markets Department Pdf
Capital flows can deliver substantial benefits for countries, but also have the potential to contribute to a buildup of systemic financial risk. Benefits, such as enhanced investment and consumption smoothing, tend to be greater for countries whose financial and institutional development enables them to intermediate capital flows safely. Post-crisis reforms, including the development of macroprudential policies (MPPs), are helping to strengthen the resilience of financial systems including to shocks from capital flows. The Basel III process has improved the quality and level of capital, reduced leverage, and increased liquid asset holdings in financial systems. Drawing on and complementing such international reforms at the national level, robust macroprudential policy frameworks focused on mitigating systemic risk can improve the capacity of a financial system to safely intermediate cross-border flows. Macroprudential frameworks can play an important role over the capital flow cycle, and help members harness the benefits of capital flows. Introducing macroprudential measures (MPMs) preemptively can increase the resilience of the financial system to aggregate shocks, including those arising from capital inflows, and can contain the build-up of systemic vulnerabilities over time, even when such measures are not designed to limit capital flows. While the risks from capital outflows should be handled primarily by macroeconomic policies, a relaxation of MPMs may assist, as long as buffers are in place, in countering financial stresses from outflows. Capital flow liberalization should be supported by broad efforts to strengthen prudential regulation and supervision, including macroprudential policy frameworks. The Fund has two frameworks to help ensure that its advice on MPPs and policies related to capital flows is consistent and tailored to country circumstances. The frameworks (the Macroprudential framework and the Institutional View on capital flows) are consistent in terms of key principles, including avoiding using MPMs and capital flow management measures (CFMs) as a substitute for necessary macroeconomic adjustment. The appropriate classification of measures is important to ensure targeted advice consistent with the two frameworks. The conceptual framework for the assessment of measures laid out in this paper will assist staff in properly identifying MPMs and measures that are designed to limit capital flows and to reduce systemic financial risk stemming from such flows (CFM/MPMs), and thereby ensure the appropriate application of the Fund’s frameworks, so that staff policy advice is consistent and well targeted. The Fund will continue to develop and share expertise in using MPMs, and integrate these findings into its surveillance and technical assistance, which should contribute to building international understanding and experience on these issues.
