Part 3-V Section Outline

Coping with Private Capital Markets

previous      next

1. The IMF Approach: Satisfy the Demands of the International Financial Markets
   1. Good governance" as a Remedy for Future Financial Crises.
   1. Increasing the transparency of financial transactions.
   2. Increasing the transparency of corporate structure and valuation.
   3. Liberalizing trade policies further.
   2. Good Governance May Help Stabilize Capital Flows in Emerging Economies, but Structural Reforms May Take Some Time.
   3. In the Meantime, the IMF has Taken Steps to Improve its Effectiveness.
   1. Special Data Dissemination Standards (SDDS)
   2. The Fund hoped improved liquidity would help it meet future crises.
2. Proposals to Reduce the Influence of Private Capital Markets on Individual Countries
   1. Some Believe Currency Boards Can Withstand Capital Flight and Speculative Assaults on a Country’s Currency.
   2. Taxing Spot-Currency Transactions (the Tobin Tax) May Inhibit Speculative Activity.
   3. Chilean Capital Controls are Intended to Reduce Short-Term Capital Inflows.
   4. Relational Investment May Encourage Long-Term, Cooperative Behavior Between Host Countries and Foreign Investors
   5. Prudential Limitations on Financial Transactions May Inhibit Speculative Activity
   6. The IMF Wants to Amend its Charter to Give it Control Over Domestic Laws Governing Capital Controls.
3. Proposals to Reform the International Monetary System
   1. Indonesia’s Crisis Illustrates Why Some Think the IMF Should be Abolished.
   2. George Soros has Proposed Creating a New International Loan Guarantee Body.
   3. The Market Should be Allowed to Function, Resulting in Bankruptcies.

[Part Three Bibliography]

previous      next