Posted on 05/28/2010 5:29:25 AM PDT by TigerLikesRooster
Capital controls should be considered in future
May 28, 2010
Korea is considering measures to regulate capital flows as part of a broader international effort, the head of the Financial Supervisory Service said yesterday.
Kim Jong-chang, the FSS governor, told foreign correspondents at the Bankers Club in Jung District, central Seoul, that “we are mulling whether to impose regulations on the inflows and outflows of foreign capital.”
Government officials have been raising the issue of capital controls in recent weeks in reaction to the global financial turmoil resulting from the European sovereign debt crisis, which has caused massive selling by foreign investors of Korean shares.
Kim said the recent global financial crisis once again exposed Korea’s vulnerabilities to the flows of foreign funds.
“The Korean market has suffered a lot due to the inflows and outflows of capital. I think it is because Korea is a small open economy,” said Kim. “Previously, the International Monetary Fund stressed the importance of cross-border capital flows. But now the IMF is expressing the opinion that some form of capital controls may be needed. That’s why we are also considering putting regulations on flows of foreign currencies.”
He stressed this matter should be discussed by the international community to come up with proper measures on capital flows since each country is faced with different economic circumstances.
(Excerpt) Read more at joongangdaily.joins.com ...
That will make waves.
P!
Standard desperation measures, which always do more harm in the end.
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