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Jose Luis Escrivá
BIS Chief Representative for the Americas
The views expressed in this presentation are my own and not necessarily those of the BIS.
IEA-BCU Roundtable on “Capital Flows, Capital Controls and Monetary Policy”, Session on Capital controls in the macroeconomic toolkitMontevideo, 7-8 December 2013
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The new case for capital controls
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• Global financial conditions and capital flows are closely related, especially in stress situations
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IMF Framework (2012)
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Brazil – IOF – Rate timeline
Obs: No chanhe sonce Jun, 2013Source: Ministry of Finance of Brazil`
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IOF - Apparent effects
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Apr 2011:Up to 24m
Mar 2012:Up to 60m
Jun 2012:Up to 24m
Dec 2012:Up to 12m
Fixed income bonds and loans inflows
In millions of U.S. dollarsGraph
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From bank to debt financing • Issuance of corporate debt has been increasing
significantly, until2013.Q3 • Use of offshore affiliates creates hidden
vulnerabilities.
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Costs associated to capital controls should be assessed in Latam against a backdrop of low and decreasing savings. Reliance on external financing is guaranteed for meny years