Review of The Institutional View on The Liberalization and Management of Capital Flows — Background Note on Principles for the Design of Measures to Address Systemic Risks from FX Mismatches

By Heedon Kang, Paavo A Miettinen, Erlend Nier, Thorvardur Tjoervi Olafsson, Gurnain Kaur Pasricha

March 30, 2022

Preview Citation

Format: Chicago

Heedon Kang, Paavo A Miettinen, Erlend Nier, Thorvardur Tjoervi Olafsson, and Gurnain Kaur Pasricha. Review of The Institutional View on The Liberalization and Management of Capital Flows — Background Note on Principles for the Design of Measures to Address Systemic Risks from FX Mismatches, (USA: International Monetary Fund, 2022) accessed November 13, 2024

Summary

This note describes the key principles for the design and implementation of preemptive CFM/MPMs. These measures should be designed to be effective—so they achieve their intended goal and are not easily circumvented—and efficient—so they minimize distortions and costs. Preemptive CFM/MPMs should be targeted, calibrated to risks, transparent, and as temporary as possible. The appropriate design depends on country circumstances, such as institutional and legal constraints, as well as the precise source of the vulnerability. Where measures that do not discriminate by residency are available and effective, they should be preferred.

Subject: Balance of payments, Capital flow management, Financial sector policy and analysis, Foreign exchange, Monetary policy, Political economy, Systemic risk

Keywords: Background note 3, Capital flow management, FX maturity mismatch, FX mismatch, Principles for the design, Systemic risk, Title page

Publication Details

Pages:

6
Volume:

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DOI:

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Issue:

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Series:

Policy Paper No. 2022/011
Stock No:

PPEA2022011
ISBN:

9798400206238
ISSN:

2663-3493

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