Capital controls
Iceland prepares for offshore króna auction
Date set for major step towards lifting capital controls, as holders of offshore króna are offered chance to swap currency, albeit at punitive rates
Conditions for lifting capital controls ‘could hardly be better' – Guðmundsson
Central Bank of Iceland governor says it is important to press ahead with liberalisation while the economy is strong and financial system stable, in latest financial stability report
Capital flow measures needed before offshore krona auction, says Guðmundsson
If the currency auction goes to plan, inward flows could strengthen and the Central Bank of Iceland needs the tools to resist them, its governor says
IMF paper questions ‘visceral opposition’ to inflow controls
Guilty by association: controls on capital inflows “inextricably” linked to those on outflows, paper says; controls not “worse” or “costlier” than other policy tools
Capital controls essential for small open economies, Guðmundsson says
Small open economies cannot conduct fully independent monetary policy if they are unwilling to use capital controls at least some of the time, Icelandic governor says
Peso down almost 30% as Argentina lifts capital controls
Capital controls lifted allowing greater access to foreign exchange; peso slides by 29% against the US dollar as markets open
Argentina’s president elect aims to dismantle complex capital controls
‘Macri-economics’ could consist of unwinding capital controls, boosting export competitiveness and unifying exchange rates, but it will be a challenge, observers say
Central Bank of Iceland under scrutiny on crisis response
Supervisory board to investigate complaints over the handling of breaches in capital controls and legal uncertainty surrounding the holding company established by the central bank
Central Bank of Iceland approves failed bank plans
Central Bank of Iceland approves ‘composition agreements’ by failed banks, offering them the opportunity to duck a heavy stability tax
Value of capital controls still up for debate
Research published by BIS and IMF points to potential benefits from capital flow measures and macro-prudential tools, but other economists question the results
ECB bulletin: risks to taxpayer funds gradually diminishing
An article in the European Central Bank's latest bulletin weighs the fiscal impact of financial sector support during the crisis, highlighting the benefits of a move towards banking union
Capital controls ineffective at handling policy trilemma, ECB paper finds
Emerging market capital controls have a limited impact on monetary policy trilemma variables and come with spillover effects, the authors warn
Iceland offers pension funds relief from capital controls
Pension funds will have access to a limited amount of foreign currency in an effort to smooth the transition as controls are lifted
Iceland’s Guðmundsson plans post-capital controls monetary redesign
‘Inflation targeting plus plus’ would help the small, open economy to pursue independent monetary policy, insulated from violent capital flows, the Icelandic governor tells Central Banking
Iceland launches plan to lift capital controls
Failed banks' estates must agree settlement with creditors within six months or face heavy one-off tax; either way this should pave way for controls to be lifted next year
China may have financial reforms backwards, economists argue
Interest rate liberalisation should take precedence over capital account opening, observers say at roundtable discussion in Hong Kong ahead of IFF China report release
IMF paper lays out new capital controls dataset
IMF working paper presents new dataset of capital control restrictions on both inflows and outflows of 10 categories of assets for 100 countries between 1995 and 2013
‘Severe’ risks around lifting capital controls, Icelandic report warns
Financial stability report highlights need for careful preparation before capital controls can be lifted; governor says most expected capital movements have been ‘well mapped out’
Iceland expects ‘significant’ progress in lifting capital controls this year
Healthy economy and sturdy banking system pave way for lifting of capital controls, but risks are 'tilted to the downside', IMF report says; central bank at a ‘difficult juncture’
Capital controls may do more harm than good: NBER paper
Working paper attempts to gauge the adverse effects of imposing capital controls, including segmented financial markets, more expensive capital, and reduced investment
IMF paper finds ‘puzzling' result from capital controls
Controls to stop capital inflows deflect them to other countries, the paper finds, but are rarely met with copycat measures in recipient countries
Choosing a suitable exchange rate suitable for price-takers
Flexible exchange rates can act as an asset price as well as a price for goods and services, so movements can distort the market for goods and services. Taxing capital inflows can address the matter
Banxico deputy says capital controls 'multilaterally detrimental'
Manuel Ramos-Francia says EMs that have implemented capital controls to stem capital flows have ‘deflected' them towards other economies, creating political tension
IMF calls on Iceland to defend central bank credibility
As the evaluation committee prepares to interview candidates for governor, IMF visit reminds Iceland of the need for a credible and independent central bank