Seminar: Hvordan man ikke skal styre kapital-strømme: IMF-guiden til udviklingslande

TIME: Tuesday, 11 December, 14 – 16

STED: Danish Institute for International Studies, Main Auditorium, Strandgade 71, ground floor, Christianshavn, 1401 Copenhagen K.

In 2010, the development community sighed in collective relief as the IMF reconsidered its long-standing rejection of capital controls.

TIME: Tuesday, 11 December, 14 – 16

STED: Danish Institute for International Studies, Main Auditorium, Strandgade 71, ground floor, Christianshavn, 1401 Copenhagen K.

In 2010, the development community sighed in collective relief as the IMF reconsidered its long-standing rejection of capital controls.

Development agendas, it was hoped, would hence be pursued without the well-known disruptions caused by large and volatile capital inflows.

And since foreign crises now come through capital rather than trade flows, developing countries could draw on the IMF’s expertise to avoid global financial volatility and contain sudden-stops.

Once details of the new view emerged, optimism faded. The IMF insisted that capital controls should only be used as a last-resort measure, after countries followed this macroeconomic policy sequence: (1) allow exchange rates to appreciate to equilibrium; (2) lower policy interest rates if no threats of overheating; (3) use sterilised interventions in currency markets to increase foreign reserves to adequate precautionary levels; and (4) tighten fiscal policy.

But this “code of conduct”, Brazil’s finance minister Guido Mantega argued, would hinder the ability of developing countries to carve their own regulatory path, including the regular use of capital controls.

For many developing countries, capital controls offer the best solution to deal with the complex strategies through which financial investors take positions in their asset markets.

This is where the IMF should focus its advice: identifying the distinctive vulnerabilities associated with the various types of international financial actors (transnational banks, non-resident investors etc) and the capital controls relevant for each type. It should further recognize that successful capital account management requires new models of central banking and changes in banking models towards longer horizons and sustainable growth models.

Speakers:
– Daniela Gabor, Senior Lecturer, University of West England
– Jakob Vestergaard, Senior Researcher, DIIS

Programme:

14.00-14.10: Introduction; Jakob Vestergaard, Senior Researcher, DIIS

14.10-14.50: How to Manage Capital Flows: The IMF Guide for Developing Countries; Daniela Gabor, Senior Lecturer, University of West England

14.50-15.05: Coffee Break

15.05-15.20: Discussant

15.20-16.00: Comments and Questions

Chair: Jakob Vestergaard, Senior Researcher, DIIS

The seminar will be held in English.

Participation is free of charge, but registration is required. Read more about the seminar and use the online registration form on “http://www.diis.dk/sw125173.asp”>the website no later than Monday, 10 December at 12 noon.

Please await confirmation by e-mail from DIIS for participation.