Dealing with Large and Volatile Capital Flows and the Role of the IMF

60 Pages Posted: 3 Feb 2017

See all articles by Pilar L´Hotellerie-Fallois

Pilar L´Hotellerie-Fallois

Banco de España

Pablo Moreno

Banco de España

Irina Balteanu

Banco de España

John Beirne

European Central Bank (ECB)

Menno Broos

European Central Bank (ECB)

Axel Brüggemann

Bank of Finland - Institute for Economies in Transition (BOFIT)

Matthieu Bussière

Banque de France

Ángel Estrada

Banco de España

Jon Frost

Bank for International Settlements (BIS) - Financial Stability Board (FSB); De Nederlandsche Bank

Michalis Ghalanos

Central Bank of Cyprus

Valerie Herzberg

Central Bank of Ireland

Bernard Kennedy

Central Bank of Ireland

Alexander Landbeck

Deutsche Bundesbank

Christina Lerner

Oesterreichische Nationalbank (OeNB)

Paul Metzemakers

De Nederlandsche Bank

Dennis Reinhardt

Bank of England

Paula Sánchez

Banco de España

Alessandro Schiavone

Bank of Italy

Thomas Tilley

National Bank of Belgium

Francesca Viani

Banco de España

Benjamin Vonessen

European Central Bank (ECB)

Date Written: September 30, 2016

Abstract

The last decade has been characterised by the pronounced volatility of capital flows. While cross-border capital flows can have many benefits for both advanced and emerging market economies, they may also carry risks, which require appropriate policy responses. Disentangling the push from the pull factors driving capital flows is key to designing appropriate policies to deal with them. Strong institutions, sound fundamentals and a large domestic investor base tend to shield economies from adverse global conditions and attract less volatile types of capital. However, when the policy space for using traditional macroeconomic policies is limited, countries may also turn to macro-prudential and capital flow management policies in a pragmatic manner. The IMF can play an important role in helping countries to deal with capital flows, through its surveillance and lending policy and through international cooperation.

Keywords: capital flows, capital flow management, international cooperation, IMF

JEL Classification: F3, F32, F38, F42, F65, G28

Suggested Citation

L´Hotellerie-Fallois, Pilar and Moreno, Pablo and Balteanu, Irina and Beirne, John and Broos, Menno and Brüggemann, Axel and Bussiere, Matthieu and Estrada, Ángel and Frost, Jon and Ghalanos, Michalis and Herzberg, Valerie and Kennedy, Bernard and Landbeck, Alexander and Lerner, Christina and Metzemakers, Paul and Reinhardt, Dennis and Sánchez, Paula and Schiavone, Alessandro and Tilley, Thomas and Viani, Francesca and Vonessen, Benjamin, Dealing with Large and Volatile Capital Flows and the Role of the IMF (September 30, 2016). ECB Occasional Paper No. 180. Available at SSRN: https://ssrn.com/abstract=2910959

Pilar L´Hotellerie-Fallois (Contact Author)

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

Pablo Moreno

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

Irina Balteanu

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

John Beirne

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Menno Broos

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Axel Brüggemann

Bank of Finland - Institute for Economies in Transition (BOFIT) ( email )

Helsinki 00101
Finland

Matthieu Bussiere

Banque de France ( email )

Paris
France

Ángel Estrada

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

HOME PAGE: http://www.bde.es/

Jon Frost

Bank for International Settlements (BIS) - Financial Stability Board (FSB) ( email )

Basel
Switzerland

De Nederlandsche Bank ( email )

PO Box 98
1000 AB Amsterdam
Amsterdam, 1000 AB
Netherlands

Michalis Ghalanos

Central Bank of Cyprus ( email )

80 Kennedy Ave
1076 Nicosia
Cyprus

Valerie Herzberg

Central Bank of Ireland ( email )

P.O. Box 559
Dame Street
Dublin, 2
Ireland

Bernard Kennedy

Central Bank of Ireland ( email )

P.O. Box 559
North Wall Quay
Dublin 1, D01F7X3
Ireland

Alexander Landbeck

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

Christina Lerner

Oesterreichische Nationalbank (OeNB) ( email )

Otto-Wagner-Platz 3, PO Box 61
Vienna,
1010 Vienna, A-1011
Austria

Paul Metzemakers

De Nederlandsche Bank ( email )

PO Box 98
1000 AB Amsterdam
Amsterdam, 1000 AB
Netherlands

Dennis Reinhardt

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

Paula Sánchez

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

Alessandro Schiavone

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Thomas Tilley

National Bank of Belgium ( email )

Brussels, B-1000
Belgium

Francesca Viani

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

HOME PAGE: http://www.bde.es

Benjamin Vonessen

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

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