From Capital Surges to Drought: Seeking Stability for Emerging Economies

by R. Ffrench-Davis (Editor), S. Griffith-Jones (Editor)

Overview

This book analyzes the new trends in capital flows to emerging markets since the Asian crisis, their determinants and policy implications. It explains why such flows have declined so dramatically in recent years, emphasising both structural and cyclical factors. Senior bankers, regulators, and well-known academics explain the behaviour of different players. The book breaks new ground by showing in detail how such behaviour has contributed to the decline of flows and their volatility. The book suggests what coping mechanisms developing countries could adopt to deal with crisis situations; what measures should be taken at the national and international levels to make recipient countries less vulnerable to international financial instability; how such instability can be reduced; and what can be done on the source countries to encourage larger more stable capital flows to developing countries.

Product Details

ISBN-13:	9781349512720
Publisher:	Palgrave Macmillan UK
Publication date:	01/01/2003
Series:	Studies in Development Economics and Policy
Edition description:	1st ed. 2003
Pages:	340
Product dimensions:	5.51(w) x 8.50(h) x (d)

About the Author

CARLOS L. BUDNEVICH Banco Central de Chile, Santiago, Chile RANDALL DODD Director, Derivatives Study Center, Washington DC, USA VALPY FITZGERALD University Reader in International Economics and Finance, University of Oxford, UK JOHN HAWKINS Senior Economist, Monetary and Economic Department, Bank for International Settlements, Basel, Switzerland GUILLERMO LARRAÍN RÍOS Chief Economist of BBVA Banco Bhif, and Associate Fellow, Centro de Economia Aplicada, Universidad de Chile, Sanitgao, Chile DAVID LUBIN Emerging Market Economist, HSBC, London, UK GRACIELA MOGUILLANSKY, Economist, Unit on Investment and corporate Strategies, United Nations Economic Commission for Latin America and the Caribbean ECLAC/CEPAL, Santiago, Chile JOSÉ ANTONIO OCAMPO Executive Secretary, United Nation Economic Commission for Latin America AVINASH PERSAUD Managing director, State Street Bank and Trust Company and Visiting Fellow, Cambridge Endowment for Research in Finance, Judge Institute, UK HELMUT REISEN Head of Research Division, OECD Development, Paris, France STEPHEN SPRATT DPhil student, University of Sussex, UK BÁRBARA STALLINGS Director of the Economic Development Division of the United Nations Economic Commission for Latin America and the Caribbean, Santiago, Chile ROGERIO STUDART Economic Affairs Officer of the United Nations Economic Commission for Latin America and the Caribbean, Santiago, Chile JOHN WILLIAMSON Senior Fellow, Institute for International Economics,Washington DC, USA

Table of Contents

Capital Flows to Emerging Economies: Does the Emperor have clothes?; S.Griffith-Jones Financial Crises and National Policy Issues: An Overview; R.Ffrench-Davis PART I: THE SUPPLY OF CAPITAL Liquidity Black Holes; A.Persaud International Bank Lending: Water Flowing Uphill; J.Hawkins Bank Lending to Emerging Markets; D.Lubin Derivatives, the Shape of International Capital Flows and the Virtues of Prudential Regulation; R.Dodd Ratings Since the Asian Crisis; H.Reisen Proposals for Curbing the Boom-Bust Cycle in the Supply of Capital to Emerging Markets; J.Williamson Non-financial Corporate Risk Management and Exchange Rate Volatility in Latin America; G.Moguillansky The New Basel Accord and Developing Countries; S.Griffith-Jones & S.Spratt The Instability of the Emerging Market Assets Demand Schedule; V.FitzGerald PART II: NATIONAL POLICY RESPONSES Capital-Account and Counter-Cyclical Prudential Regulation in Developing Countries; J.A.Ocampo How Optimal are the Extremes? Latin American Exchange Rate Policies during the Asian Crisis; R.Ffrench-Davis & G.Larraín Counter-Cyclical Fiscal Policy; C .Budnevich Financial Regulation and Supervision in Emerging Markets: The Experience of Latin America since the Tequila Crisis; B.Stallings & R.Studart

Editorial Reviews

'The project comprises of numerous other papers that researchers have contributed to this huge and far-impacting report, soon to be published as a book. It will provide an in-depth analysis of new trends in the supply of vehicles of capital flows and their determinants, as well as an evaluation of national policies to reduce volatility, which is basically a reflection of shortcomings in the countries' development process and the weakness of their mechanisms for regulating transactions that have opened the way for unusual financial crises in those systems.' - Roma Rana, United Nations Chronicle

'If one ranks subjects by the ratio of their importance to human welfare over the extent of understanding of them among the educated public, the subject of capital mobility and capital controls must come near the top of the list. This book is a marvellously lucid and accessible set of essays from some of the leading experts in the field - who unlike many other contributors to the literature, do not assume that what is best for finance is best for the whole economy and society.' - Robert Hunter Wade, Professor of Political Economy, Development Studies Institute, London School of Economics

'This book is outstanding in combining economic analysis with policy implications at the national and international level. It looks at capital flows to emerging markets from different perspectives and provides a comprehensive overview of problems, issues and possible solutions without getting lost in economic jargon. This seminal work must be read by anyone concerned about international development and the future of the world economy.' - Bernhard G. Gunter, EPIAM Project Director, New Rules for Global Finance Coalition, Washington DC

'This edition contains different contributions by well-known scholars on capital flows to emerging market economies. The book is a must read both for practitioners as well as academics interested in up to date analyses of the determinants and policy implications of capital flows to emerging markets since the Asian crisis.' - Robert Lensink, Professor in Finance and Financial Markets, Department of Finance, Faculty of Economics, University of Groningen

'The period following the Asian crisis has not only witnessed a big decline in the size of capital flows to emerging markets, but also a great deal of volatility in those flows. Ffrench Davis, Griffith-Jones and collaborators have produced an extremely useful synthesis of developments that have contributed to the decline and volatility in capital flows, with thoughtful analysis and generous statistics to support it. The attempts to redesign the international financial architecture need to pay careful attention to reforms by suggesting changes that both borrowers and lenders need to make. This book is a timely attempt to seek to address this vital issue by suggesting reforms that could be made to make recipient countries less vulnerable to global financialinstability.' - Abdur Chowdhury, Chief Economist and Director, Economic Analysis Division, United Nations Economic Commission for Europe, Geneva

From the Publisher