capital controls

While the emerging markets are getting a bit of a reprieve today, it bears noting that the move to so-called safe haven assets and currencies has begun. This suggests to me that George Magnus’ warning about this emerging markets crisis must…

It's Easter weekend here in Germany and I caught this interview with Willem Buiter from the Financiëele Dagblad that I get by e-mail each morning. I thought it was significant enough that I would translate it. Buiter has been fairly…

Cyprus has imposed temporary capital controls. This column sheds light on how temporary and how damaging they are likely to be, based on Iceland’s experience. The longer controls exist, the harder they are to abolish. Icelandic capital…

Today Cyprus voted to reject the deposit tax with 36 MPs voting against and 19 abstaining. One MP was absent. No one voted for the deposit tax. And so this trial balloon of bailing in insured depositors has crashed and burned spectacularly.…

Quick post here to continue the theme of Christine Lagarde doing a complete makeover of the IMF. Yesterday, the Financial Times reported on an IMF staff paper that accepted capital controls as a necessary evil in specific cases, a sharp…

While the usual assumption is that current account deficits lead more-or-less directly to currency depreciation, the evidence for this effect is not clear-cut. Implications of this depend on the currency regime. According to the well-known…

Brazil stands out now for being one of the few in EM to be cutting rates. We think most in EM will be cutting rates by Q1 2012 due to the deteriorating global growth outlook, and so BRL will still likely continue to enjoy a big yield…

I would say that Stiglitz is right that Iceland did well in large measure because Iceland was not subjected to the kind of austerity that you traditionally see in these kinds of programs and which is an anti-growth policy. We are seeing the…

According to the IMF, Iceland has graduated from its Fund-supported programme with unqualified success. This column begs to differ.

Poul Thomsen wrote an article on the IMF’s blog site about Iceland that I would to highlight. The lessons bear repeating given the economic problems in Europe and the US. The IMF worked with Iceland to stabilise the economy and avoid…