A Modernized Approach to Managing the Risks in Cross-Border Capital Movements

24 Pages Posted: 27 Jun 2001

See all articles by R. Barry Johnston

R. Barry Johnston

International Monetary Fund (IMF)

Inci Otker-Robe

International Monetary Fund (IMF) - Monetary and Capital Markets Department; World Bank

Abstract

This paper outlines a "modern" approach to managing risks in cross-border capital movements that is consistent with an environment of increased and liberalized capital flows. Key elements of this approach include: a consistent monetary and exchange rate policy mix to avoid incentives for volatile capital flows; prudential management of the specific risks in capital flows; supporting financial sector reforms; and appropriate sequencing of liberalization. The approach can reduce the potential size of the shocks associated with capital movements and increase the resilience of the financial system to such shocks; overtime, it is expected to reduce the need for capital controls.

JEL Classification: E52, F32, G28

Suggested Citation

Johnston, R. Barry and Ötker-Robe, İnci, A Modernized Approach to Managing the Risks in Cross-Border Capital Movements. IMF Policy Working Paper No. 99/6. Available at SSRN: https://ssrn.com/abstract=216989 or http://dx.doi.org/10.2139/ssrn.216989

R. Barry Johnston (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

İnci Ötker-Robe

International Monetary Fund (IMF) - Monetary and Capital Markets Department ( email )

United States
202 623-7000 (Phone)
202 623-4661 (Fax)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
168
Abstract Views
1,107
rank
176,511
PlumX Metrics