INTERNATIONAL CAPITAL FLOWS MANAGEMENT MEASURES AMID THE CHANGING GLOBAL ENVIRONMENT
INTERNATIONAL CAPITAL FLOWS MANAGEMENT MEASURES AMID THE CHANGING GLOBAL ENVIRONMENT

Summary/Abstract: Even though international capital flows bring significant direct and indirect economic benefits, in case of pronounced volatility, they may increase the risk of crises and adversely affect economic growth. Therefore, the policymakers are challenged to determine how to effectively harness the benefits while mitigating the risks associated with the international capital flows. This paper discusses several aspects related to managing international capital flows. We show how the approach of international financial institutions toward capital flows management measures has adapted to the changing global environment. We detail the current operational framework for capital flow management and report on the recent international practice with capital flow management. The analyzed data show that capital account openness has gradually increased, whereas, on the net, macroprudential policy has mostly been tightened. Eventually, we discuss the most recent recommendations regarding international capital flow management measures within the novel Integrated Policy Framework. In the future, further promotion and development of a consistent global approach toward managing international capital flows should remain one of the main objectives of international financial institutions.

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