Managing Financial Integration and Capital Mobility -- Policy Lessons from the Past Two Decades

Aizenman, Joshua; Pinto, Brian

dc.creator	Aizenman, Joshua
dc.creator	Pinto, Brian
dc.date	2012-03-19T18:04:27Z
dc.date	2012-03-19T18:04:27Z
dc.date	2011-08-01
dc.date.accessioned	2023-02-17T20:59:07Z
dc.date.available	2023-02-17T20:59:07Z
dc.identifier	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110831145953
dc.identifier	http://hdl.handle.net/10986/3549
dc.identifier.uri	http://localhost:8080/xmlui/handle/CUHPOERS/244513
dc.description	The accumulated experience of emerging markets over the past two decades has laid bare the tenuous links between external financial integration and faster growth, on the one hand, and the proclivity of such integration to fuel costly crises on the other. These crises have not gone without learning. During the 1990s and 2000s, emerging markets converged to the middle ground of the policy space defined by the macroeconomic trilemma, with growing financial integration, controlled exchange rate flexibility, and proactive monetary policy. The OECD countries moved much faster toward financial integration, embracing financial liberalization, opting for a common currency in Europe, and for flexible exchange rates in other OECD countries. Following their crises of 1997-2001, emerging markets added financial stability as a goal, self-insured by building up international reserves, and adopted a public finance approach to financial integration. The global crisis of 2008-2009, which originated in the financial sector of advanced economies, meant that the OECD "overshot" the optimal degree of financial deregulation while the remarkable resilience of the emerging markets validated their public finance approach to financial integration. The story is not over: with capital flowing in droves to emerging markets once again, history could repeat itself without dynamic measures to manage capital mobility as part of a comprehensive prudential regulation effort.
dc.language	English
dc.relation	Policy Research working paper ; no. WPS 5786
dc.rights	CC BY 3.0 IGO
dc.rights	http://creativecommons.org/licenses/by/3.0/igo/
dc.rights	World Bank
dc.subject	ACCOUNTING
dc.subject	ARBITRAGE
dc.subject	BAILOUT
dc.subject	BAILOUTS
dc.subject	BALANCE OF PAYMENTS
dc.subject	BALANCE SHEET
dc.subject	BALANCE SHEETS
dc.subject	BALANCE-OF-PAYMENTS CRISES
dc.subject	BANK BRANCHES
dc.subject	BANK DEBT
dc.subject	BANK LENDING
dc.subject	BANK LOANS
dc.subject	BANKING SYSTEM
dc.subject	BOND
dc.subject	BOND ISSUANCE
dc.subject	BONDS
dc.subject	BORROWING COSTS
dc.subject	BUDGET CONSTRAINT
dc.subject	BUSINESS CYCLE
dc.subject	CAPITAL ACCOUNT
dc.subject	CAPITAL BASE
dc.subject	CAPITAL FLOW
dc.subject	CAPITAL FLOWS
dc.subject	CAPITAL FUNDS
dc.subject	CAPITAL GAINS
dc.subject	CAPITAL INFLOWS
dc.subject	CAPITAL MOBILITY
dc.subject	CAPITAL OUTFLOWS
dc.subject	CAPITAL STOCK
dc.subject	CENTRAL BANK
dc.subject	CENTRAL BANK BILLS
dc.subject	CENTRAL BANKS
dc.subject	COMMERCIAL BANKS
dc.subject	CONTINGENT LIABILITIES
dc.subject	COUNTRY RISK
dc.subject	CREDIBILITY
dc.subject	CURRENCY
dc.subject	CURRENCY BOARDS
dc.subject	CURRENCY COMPOSITION
dc.subject	CURRENCY CRISES
dc.subject	CURRENCY CRISIS
dc.subject	CURRENCY MISMATCHES
dc.subject	CURRENT ACCOUNT DEFICITS
dc.subject	CURRENT ACCOUNT SURPLUS
dc.subject	CURRENT ACCOUNT SURPLUSES
dc.subject	DEBT
dc.subject	DEBT CRISIS
dc.subject	DEBT INSTRUMENTS
dc.subject	DEBT OVERHANG
dc.subject	DEPOSIT
dc.subject	DEPOSIT INSURANCE
dc.subject	DEPOSITS
dc.subject	DERIVATIVE
dc.subject	DERIVATIVE CONTRACTS
dc.subject	DERIVATIVES
dc.subject	DEVELOPING COUNTRIES
dc.subject	DEVELOPING COUNTRY
dc.subject	DISCLOSURE REQUIREMENTS
dc.subject	DOMESTIC BANKING
dc.subject	DOMESTIC BANKS
dc.subject	DOMESTIC CAPITAL
dc.subject	DOMESTIC CURRENCY
dc.subject	DOMESTIC INTEREST RATE
dc.subject	EMERGING ECONOMIES
dc.subject	EMERGING MARKET
dc.subject	EMERGING MARKET COUNTRIES
dc.subject	EMERGING MARKET COUNTRY
dc.subject	EMERGING MARKET ECONOMIES
dc.subject	EMERGING MARKETS
dc.subject	EQUITY FLOWS
dc.subject	EQUITY FUNDS
dc.subject	EXCHANGE CONTROLS
dc.subject	EXCHANGE RATE
dc.subject	EXCHANGE RATE INSTABILITY
dc.subject	EXPENDITURE
dc.subject	EXPENDITURES
dc.subject	EXTERNAL BORROWING
dc.subject	EXTERNAL BORROWINGS
dc.subject	EXTERNAL COMMERCIAL BORROWING
dc.subject	FEDERAL RESERVE
dc.subject	FEDERAL RESERVE BANK
dc.subject	FINANCIAL ASSET
dc.subject	FINANCIAL CRISES
dc.subject	FINANCIAL CRISIS
dc.subject	FINANCIAL DEVELOPMENT
dc.subject	FINANCIAL FLOWS
dc.subject	FINANCIAL INSTABILITY
dc.subject	FINANCIAL INSTITUTIONS
dc.subject	FINANCIAL LIBERALIZATION
dc.subject	FINANCIAL OPENNESS
dc.subject	FINANCIAL STABILITY
dc.subject	FINANCIAL STRESS
dc.subject	FINANCIAL SYSTEM
dc.subject	FINANCIAL SYSTEMS
dc.subject	FISCAL DEFICITS
dc.subject	FISCAL POLICIES
dc.subject	FISCAL POLICY
dc.subject	FIXED EXCHANGE RATE
dc.subject	FIXED EXCHANGE RATES
dc.subject	FIXED INCOME
dc.subject	FIXED INCOME INVESTMENT
dc.subject	FLEXIBLE EXCHANGE RATES
dc.subject	FORECLOSURE
dc.subject	FOREIGN BANK
dc.subject	FOREIGN BANKS
dc.subject	FOREIGN CAPITAL
dc.subject	FOREIGN CURRENCIES
dc.subject	FOREIGN CURRENCY
dc.subject	FOREIGN CURRENCY DEBT
dc.subject	FOREIGN DIRECT INVESTMENT
dc.subject	FOREIGN EQUITY
dc.subject	FOREIGN EXCHANGE
dc.subject	FOREIGN EXCHANGE RESERVES
dc.subject	FOREIGN INFLOWS
dc.subject	FOREIGN INVESTMENT
dc.subject	FOREIGN INVESTORS
dc.subject	FOREIGN PORTFOLIO INVESTMENTS
dc.subject	FOREIGN PORTFOLIO INVESTORS
dc.subject	FUTURES
dc.subject	FUTURES MARKET
dc.subject	GLOBAL ECONOMY
dc.subject	GLOBALIZATION
dc.subject	GOVERNMENT DEBT
dc.subject	HOLDING
dc.subject	HOLDINGS
dc.subject	INCOME TAX
dc.subject	INDEBTEDNESS
dc.subject	INFLATIONARY EXPECTATIONS
dc.subject	INSURANCE
dc.subject	INSURANCE MARKETS
dc.subject	INTEREST RATE CAP
dc.subject	INTEREST RATE CAPS
dc.subject	INTEREST RATES
dc.subject	INTERNATIONAL BANK
dc.subject	INTERNATIONAL CAPITAL
dc.subject	INTERNATIONAL CAPITAL MARKETS
dc.subject	INTERNATIONAL ECONOMICS
dc.subject	INTERNATIONAL FINANCE
dc.subject	INTERNATIONAL FINANCIAL INTEGRATION
dc.subject	INTERNATIONAL TRADE
dc.subject	INVENTORY
dc.subject	INVESTMENT RATE
dc.subject	INVESTMENT RATES
dc.subject	LENDER
dc.subject	LENDER OF LAST RESORT
dc.subject	LEVY
dc.subject	LIABILITY
dc.subject	LIQUIDATION
dc.subject	LIQUIDITY
dc.subject	LOAN
dc.subject	LOCAL BANK
dc.subject	LOCAL CURRENCY
dc.subject	MACROECONOMIC CRISES
dc.subject	MACROECONOMIC CRISIS
dc.subject	MACROECONOMIC POLICIES
dc.subject	MACROECONOMIC POLICY
dc.subject	MACROECONOMIC RISK
dc.subject	MARKET ACCESS
dc.subject	MARKET CAPITALIZATION
dc.subject	MARKET INTEGRATION
dc.subject	MATURITIES
dc.subject	MATURITY
dc.subject	MONETARY FUND
dc.subject	MONETARY POLICY
dc.subject	MORAL HAZARD
dc.subject	MORTGAGE
dc.subject	NATIONAL INVESTMENT
dc.subject	NATIONAL SAVING
dc.subject	NATIONAL SAVINGS
dc.subject	OPEN ECONOMIES
dc.subject	OPEN ECONOMY
dc.subject	OPPORTUNITY COST
dc.subject	OUTPUT LOSS
dc.subject	PENSION
dc.subject	PENSION FUNDS
dc.subject	PERMANENT INCOME HYPOTHESIS
dc.subject	POLITICAL ECONOMY
dc.subject	PORTFOLIO
dc.subject	PRICE RISK
dc.subject	PRIVATE BANKS
dc.subject	PRIVATE CAPITAL
dc.subject	PRIVATE EQUITY
dc.subject	PRUDENTIAL REGULATION
dc.subject	PRUDENTIAL REGULATIONS
dc.subject	PRUDENTIAL SUPERVISION
dc.subject	PUBLIC DEBT
dc.subject	PUBLIC FINANCE
dc.subject	PUBLIC FINANCES
dc.subject	PUBLIC INVESTMENTS
dc.subject	REAL EXCHANGE RATE
dc.subject	RESERVE
dc.subject	RESERVE REQUIREMENT
dc.subject	RESERVE REQUIREMENTS
dc.subject	RESERVES
dc.subject	RETURN
dc.subject	RETURNS
dc.subject	RISK EXPOSURE
dc.subject	RISK NEUTRAL
dc.subject	SAFETY NETS
dc.subject	SAVINGS RATES
dc.subject	SETTLEMENT
dc.subject	SHORT-TERM CAPITAL
dc.subject	SHORT-TERM DEBT
dc.subject	SHORT-TERM EXTERNAL DEBT
dc.subject	SOVEREIGN DEBT
dc.subject	SOVEREIGN RISK
dc.subject	STOCK MARKET
dc.subject	STOCKS
dc.subject	SWAP
dc.subject	TAX
dc.subject	TAX COLLECTION
dc.subject	TAX ON INTEREST INCOME
dc.subject	TAX REGIME
dc.subject	TAX TREATMENT
dc.subject	TRANSACTION
dc.subject	TRANSPARENCY
dc.subject	TREASURY
dc.subject	TREASURY BILL
dc.subject	TREATY
dc.subject	VALUATION
dc.subject	WITHHOLDING TAX
dc.title	Managing Financial Integration and Capital Mobility -- Policy Lessons from the Past Two Decades
dc.type	Publications & Research :: Policy Research Working Paper
dc.coverage	The World Region
dc.coverage	The World Region