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| Title: | | Capital-account and counter-cyclical prudential regulations in developing countries  |
| Authors: | | Ocampo, José Antonio |
| Issue Date: | | 2002 |
| Series/Report no.: | | WIDER Discussion Papers // World Institute for Development Economics (UNU-WIDER) 2002/82 |
| Abstract: | | This paper explores the complementary use of two instruments to manage capital-account volatility in developing countries: capital-account regulations and counter-cyclical prudential regulation of domestic financial intermediaries. Capitalaccount regulations can provide useful instruments in terms of both improving debt profiles and facilitating the adoption of (possibly temporary) counter-cyclical macroeconomic policies. Prudential regulation and supervision should take into account not only the microeconomic risks, but also the macroeconomic risks associated with boom-bust cycles. It should thus introduce counter-cyclical elements into prudential regulation and supervision, together with strict rules to prevent currency mismatches and reduce maturity mismatches. These instruments should be seen as a complement to counter-cyclical macroeconomic policies and, certainly, neither of them can nullify the risks that pro-cyclical macroeconomic policies may generate. – cycles ; capital flows ; prudential regulation ; counter-cyclical policies |
| JEL: | | E32 F32 F41 O11 |
| ISBN: | | 9291902896 |
| Document Type: | | Working Paper |
| Appears in Collections: | | WIDER Discussion Papers, United Nations University (UNU)
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