UNCTAD-GEGI Policy Brief
Workshop on Capital Account Regulations and Global Economic Governance
Since the global financial crisis, a consensus has emerged around the need to regulate capital flows in order to reduce the chances of future crises and to mitigate their damage if they do occur. Many emerging economies have already introduced measures to reregulate cross-border finance. However, these economies are concerned that some of the global and regional agreements they have negotiated over the last two decades may unduly constrain their room to deploy effective measures. There is thus a need for more policy space so that developing countries can adopt effective capital account regulation (CAR) to deal with both excessive capital inflows and sudden outflows. At the global level, there is a need for comprehensive reform of the entire financial architecture and more coordination on macroeconomic policy whereby both source and recipient countries are targeted.