国际金融英文版(托马斯a普格尔著)---chapter7.ppt

Reducing the frequency of financial crises There are other proposals, but they are more controversial. One proposal is that developing countries should end efforts to fix or heavily manage the exchange rate values of their currencies. But a competing proposal is that developing countries should move to nearly permanently fixed exchange rates, with greater use of currency board or dollarization. Another proposal is that the IMF should receive more resources so that it can establish large lines of credit to developing countries with sound economic policies. But the competing proposal is that the IMF should be abolished, or at least that its rescue activities be severely limited. Reducing the frequency of financial crises: bank regulation and supervision Banks are considered to have a special role in an economy. In developing countries banks are often especially important, because bank lending is also the major source of financing for local businesses. With weak supervision and an explicit or implicit guarantee that the government will rescue banks in trouble, banks have incentives to borrow too much internationally, and banks are more willing to take the risk of unhedged foreign-currency liabilities. The proposal for better bank regulation and supervision in developing countries is not controversial. The challenge is in the implementation. Reducing the frequency of financial crises: capital controls Capital controls could take many forms, including an outright limit or prohibition, a tax that must be paid to the government equal to some portion of the borrowing, or a requirement that some portion of the borrowing be placed in a deposit with the country’s central bank. There are three ways in which such controls can reduce the risk of financial crisis. Reducing the frequency of financial crises: capital controls The costs of controls A major cost of the controls is the loss of the gains from international borrowing, to the extent that they discourage capital inflows.