SNB research highlights trade-offs in use of capital controls

The five SDR currencies

Capital controls can tame capital inflows into emerging markets economies’ (EMEs) corporate bond markets, but they can also limit job creation, new research finds.

In the Swiss National Bank (SNB) working paper, Philippe Bacchetta, Rachel Cordonier and Ouarda Merrouche analyse firm-level data on corporate bond issuance in 17 EMEs between 2003 and 2015.

“We find that EME companies are more likely to issue bonds in foreign currency when US interest rates are low,” say the authors. “This increase

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