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Macroprudential Regulation of International Finance: Managing Capital Flows and Exchange Rates

by Dongsoo Kang and Andrew Mason (eds.)

KDI/EWC series on Economic Policy

Publisher: Cheltenham, UK and Northampton, MA: Edward Elgar Publishing, Ltd.
Available From: Edward Elgar Publishing, Ltd.
Publication Date: 2016
ISBN: 978-1-78536-956-8
Binding: hardcover
Pages: xii, 316

 

Recent events, such as capital flow reversals and banking sector crises, have shaken faith in the widely held belief in the benefits of greater financial integration and financial deepening, which are typical in advanced economies. This book shows that emerging economies have occasionally weathered the storm best, despite the supposed burden of 'weak institutions'.

Written by leading scholars and practitioners, the authors demonstrate that a better policy framework requires reliable indicators of vulnerability to financial instability. Using empirical evidence and case studies, the twelve chapters stress the necessity of improved policy tools and automatic stabilizers that anticipate and limit the vulnerabilities to financial crises. Cross-border capital flows, international reserves and foreign exchange markets are covered in depth.

This timely book offers an insightful overview and policy solutions to the issues surrounding macroprudential regulation of economies in a globalized world. It is required reading for students and scholars of international finance and regulation.

 

Details and ordering information at Edward Elgar Publishing.
 

CONTENTS
 
1  Introduction and overview
2  Macroprudential policies: indicators and tools
3  Business and financial cycles in emerging markets: lessons for macroprudential policies
4  Capital controls: a pragmatic proposal
5  Irrational expectations, financial amplification and prudential capital controls
6  Optimal international reserves with sudden stop risks
7  International reserves for emerging economies
8  Foreign currency liquidity risk and prudential regulation of banks
9  Investment patterns of foreign bank branches in Korea and their role in the foreign exchange market
10  The role of reserves in a small open economy: the case of New Zealand
11  Facing volatile capital flows: the role of exchange rate flexibility and foreign assets
12  Risk hedging in Korea's financial markets: the impact of foreign investors