Liberalizing Cross-Border Capital Flows: How Effective Are Institutional Arrangements against Crisis in Southeast Asia
Steinherr, Alfred; Cisotta, Alessandro; Klär, Erik; Šehović, Kenan | November 2006
Abstract
This paper examines capital controls in two ways. First, it assesses whether capital controls have an economic justification within the context of an economy’s and, in particular, its financial sector’s stage of development. It concludes that capital controls can be justified in countries with an immature financial sector and macroeconomic imbalances. Second, it presents survey of current capital controls in ASEAN+3. It identifies three avenues for making controls more efficient: (i) a tax on capital inflows, or alternatively, a Tobin tax; (ii) a replacement of extensive administrative controls with stricter prudential standards for financial institutions; and (iii) a special treatment for Asian currency unit (ACU) operations, implying selective capital flow liberalization.
Citation
Steinherr, Alfred; Cisotta, Alessandro; Klär, Erik; Šehović, Kenan. 2006. Liberalizing Cross-Border Capital Flows: How Effective Are Institutional Arrangements against Crisis in Southeast Asia. © Asian Development Bank. http://hdl.handle.net/11540/4204. License: CC BY 3.0 IGO.Keywords
Cofinancing
Development Financing
Economic Development and Finance
Finance
Financial Advisory Services
Financial Assistance
Financial Support
ADB
Self Financing
Aid Financing
Financial Aid
Development Banks
Project Impact
Development Banks
Asset allocation
Investment management
Commercial documents
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Citable URI
http://hdl.handle.net/11540/4204Metadata
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