Front Matter

Front Matter

Author(s):
Akira Ariyoshi, Andrei Kirilenko, Inci Ötker, Bernard Laurens, Jorge Canales Kriljenko, and Karl Habermeier
Published Date:
May 2000
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    © 2000 International Monetary Fund

    Production: IMF Graphics Section

    Typesetting: Joseph Ashok Kumar

    Cataloging-in-Publication Data

    Capital controls: country experiences with their use and liberalization Akira/Ariyoshi… [et al.].—Washington, D.C.: International Monetary Fund, 2000.

    p. cm.—(Occasional paper, ISSN 0251-6365; no. 190)

    Glossary of abbreviations.

    Prepared by Akira Ariyoshi, Karl Habermeier, Bernard Laurens, İnci ötker-Robe, Jorge Iván Canales-Kriljenko, and Andrei Kirilenko.

    Includes bibliographical references.

    ISBN 1-55775-874-3

    1. Monetary policy. 2. Capital movements. 3. Capital account. 4. Foreign exchange rates. 5. Capital market. 6. Financial crises. 7. Risk management. I. Ariyoshi, Akira. II. International Monetary Fund. III. Occasional papers (International Monetary Fund); 190. HG230.3.C364 2000

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    Contents

    The following symbols have been used throughout this paper:

    • … to indicate that data are not available:

    • — to indicate that the Figure is zero or less ihun hall the final digit shown, or that the item does not exist;

    • – between years or months (i.e., 1997–98 or January-June) to indicate the years or months covered, including the beginning and ending years or months;

    • / between years or months (i.e.. 1997/98) to indicate a crop or fiscal (financial) year.

    “Billion” means a thousand million.

    Minor discrepancies between constituent figures and totals are due to rounding.

    The term “country,” as used in this paper, does not in all cases refer to a territorial entity that is a state as understood by international law and practice: the term also covers some territorial entities that are not states, but for which statistical data are maintained and provided internationally on a separate and independent basis.

    Preface

    The role that large reversals of capital inflows have played in the recent currency crises in Asia, Russia, and Latin America has led to a renewed interest in how capital controls and other policies could help reduce the volatility of capital flows. This paper aims to develop a deeper understanding of the role that capital controls may play in coping with volatile movements of capital and the issues that arise in the rapid liberalization of the capital account by reviewing the experiences of countries with the use of capital controls and liberalization of the capital account under different circumstances, including crisis situations. It also studies the relationship between prudential policies and capital controls, and illustrates how better prudential practices and accelerated financial reforms could address the risks involved in cross-border transactions, thus providing an alternative to capital controls.

    The material in this paper was originally prepared for discussion in the IMF’s Executive Board in September 1999. It was prepared under my direction, by a staff team led by Akira Ariyoshi and consisting of Karl Habermeier, Bernard Laurens, Inci Otker-Robe, Jorge Iván Canales-Kriljenko, and Andrei Kirilenko; Matthew Fleming provided research assistance and Francine Koch, Claudia Mariel, Joanna Meza-Cuadra, and Fabienne Piccinni provided secretarial support. Marina Primorac edited the manuscript and coordinated the production of the publication.

    The paper has benefited from comments of Executive Directors, colleagues in MAE, and in other departments in the IMF. The views expressed in the paper are those of the IMF staff and do not necessarily reflect the views of national authorities or IMF Executive Directors.

    Stefan Ingves

    Director

    Monetary and Exchange Affairs Department

    Glossary of Abbreviations

    ADR

    American depository receipt

    ALLL

    Allowance for loan and lease losses

    AREAER

    Annual Report on Exchange Arrangements and Exchange Restrictions

    ATTR

    Allocated Transfer Risk Reserves

    NBER

    National Bureau of Economic Research

    BIBF

    Bangkok International Banking Facilities

    BIS

    Bank for International Settlements

    CAMEL

    Capital, Asset, Management, Equity, Liquidity

    EC

    Economic Community

    EMU

    European Monetary Union

    ERM

    Exchange Rate Mechanism

    ESAF

    Enhanced Structural Adjustment Program

    FEBC

    Foreign Exchange Bearer Certificates of Deposit

    FII

    foreign institutional investor

    FIYF

    Fixed Income Yield Funds

    FOGADE

    Venezuelan Deposit Insurance Agency

    GAAP

    Generally Accepted Accounting Principles

    GDP

    Gross Domestic Product

    GDR

    Global Depository Receipt

    GKO

    Russian treasury bills

    IAIS

    International Association of Insurance Supervisors

    ICERC

    Interagency Country Exposure Committee

    IOSCO

    International Organization of Securities Commissions

    LIBOR

    London Interbank Offered Rate

    MESDAQ

    Malaysia Exchange of Securities Dealing and Automated Quotation

    MICEX

    Moscow Interbank Currency Exchange

    MSCI

    Morgan Stanley Capital Index

    NBFI

    nonbank financial institution

    NRI

    nonresident Indian

    OFZs

    Russian long-term federal bonds

    SDDS

    Special Data Dissemination Standard

    URR

    unremunerated reserve requirement

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