Asian Development Review - Volume 29 (2) (September 2012)

Abstract

Widespread liberalization in the 1980s and 1990s enabled the freer movement of capital across international borders. Alongside large and often volatile movements in capital flows, risks to macro stability and the health of the financial system have led many countries to reconsider the wisdom of continuing to allow unimpeded flows of capital.

Asia's strong recovery in the aftermath of the global financial crisis of 2007-2008 as well as continuing problems in the United States and the European Union presage even larger flows of capital to Asia. This has led to a rethinking about the wisdom of unfettered cross-border capital flows and ways to manage capital flows, including the potential usefulness of capital controls.

Capital Controls

The two issues for 2012 of the Asian Development Reviewcover the proceedings of ADB's Forum on Capital Controls held on 14 July 2011. The first issue examines the context in which such controls could be useful as part of a broader menu of tools in the policymaker's toolkit. This issue (ie., second issue) assesses the experiences of selected Asian countries in using de jure capital controls.