scholarly journals Capital Flows, Macroeconomic Management, and the Financial System: Turkey, 1989-97

1999 ◽  
Author(s):  
Cevdet Denizer ◽  
Oya Celasun ◽  
Dong He
Keyword(s):  
Capital Flows ◽  
Financial System ◽  
Macroeconomic Management

Financial markets as commensurating machines

2019 ◽  
Vol 58 (4) ◽  
pp. 539-565
Author(s):  
Barbara Kuchler
Keyword(s):  
Financial Markets ◽  
Capital Markets ◽  
Capital Market ◽  
Capital Flows ◽  
Financial System ◽  
Financial Assets ◽  
Financial Instruments ◽  
Black Scholes ◽  
Derivatives Markets

Ever since the crisis of 2008, the dynamism and self-referentiality of financial markets have puzzled observers. This article argues that this dynamism is the product of a long process of commensuration, by which ever more heterogeneous financial assets and financial instruments have come to be compared with, substituted for, and valuated relatively to one another, and have thereby been condensed into a highly interconnected financial system. This trajectory can be found both in the long-term historical emergence of financial markets from ancient origins and in the more recent transformations of the financial system since the 1970s, including (i) the rise of derivatives markets, and (ii) the rise of capital markets as against bank-intermediated capital flows. The rise of derivatives markets was triggered by the commensuration of basic securities (such as stock, bond) and derivatives (such as options, futures), established by the Black-Scholes-Merton theory of option pricing. The rise of capital markets was rooted in the commensuration – and hence, competition and substitution – of bank products (such as loans, deposits) and non-bank products (capital market securities).

scholarly journals Transformation of the agricultural financial system in the age of globalisation

2017 ◽  
Vol 63 (No. 12) ◽  
pp. 548-558 ◽  
Author(s):  
Brzozowska Anna ◽  
Bubel Dagmara ◽  
Kalinichenko Antonina ◽  
 Nekrasenko Larysa
Keyword(s):  
Economic Growth ◽  
Financial Markets ◽  
Capital Flows ◽  
Financial Integration ◽  
Financial System ◽  
The Other ◽  
Financial Policy ◽  
Financial Flows ◽  
European Agriculture ◽  
Financial Globalisation

The paper is an attempt to address the advantages and risks connected with the wave of financial globalisation, with a focus on its impact on financial policy in European agriculture. The aim of the paper is to identify the basic conditions of the functioning and change of the financial system of agriculture under the conditions of the globalisation of financial markets. Financial globalisation, also referred to as financial integration or openness, is understood as an increase in global ties and interdependences caused by capital flows. Potentially, globalisation can bring a lot of benefits, which are manifested in an acceleration of economic growth and decreased fluctuation in consumption, which should further improve the level of overall prosperity. On the other hand, however, internationalisation of financial flows entails a range of threats, including the possibility of crisis.

Increasing Resilience to Large and Volatile Capital Flows—The Role of Macroprudential Policies

Policy Papers ◽  
2017 ◽  
Vol 2017 (20) ◽  
Author(s):  
Keyword(s):  
Capital Flows ◽  
Financial Risk ◽  
National Level ◽  
Financial System ◽  
Institutional Development ◽  
Capital Flow ◽  
Macroprudential Policy ◽  
Financial Systems ◽  
Macroprudential Policies ◽  
Policy Frameworks

Capital flows can deliver substantial benefits for countries, but also have the potential to contribute to a buildup of systemic financial risk. Benefits, such as enhanced investment and consumption smoothing, tend to be greater for countries whose financial and institutional development enables them to intermediate capital flows safely. Post-crisis reforms, including the development of macroprudential policies (MPPs), are helping to strengthen the resilience of financial systems including to shocks from capital flows. The Basel III process has improved the quality and level of capital, reduced leverage, and increased liquid asset holdings in financial systems. Drawing on and complementing such international reforms at the national level, robust macroprudential policy frameworks focused on mitigating systemic risk can improve the capacity of a financial system to safely intermediate cross-border flows. Macroprudential frameworks can play an important role over the capital flow cycle, and help members harness the benefits of capital flows. Introducing macroprudential measures (MPMs) preemptively can increase the resilience of the financial system to aggregate shocks, including those arising from capital inflows, and can contain the build-up of systemic vulnerabilities over time, even when such measures are not designed to limit capital flows. While the risks from capital outflows should be handled primarily by macroeconomic policies, a relaxation of MPMs may assist, as long as buffers are in place, in countering financial stresses from outflows. Capital flow liberalization should be supported by broad efforts to strengthen prudential regulation and supervision, including macroprudential policy frameworks. The Fund has two frameworks to help ensure that its advice on MPPs and policies related to capital flows is consistent and tailored to country circumstances. The frameworks (the Macroprudential framework and the Institutional View on capital flows) are consistent in terms of key principles, including avoiding using MPMs and capital flow management measures (CFMs) as a substitute for necessary macroeconomic adjustment. The appropriate classification of measures is important to ensure targeted advice consistent with the two frameworks. The conceptual framework for the assessment of measures laid out in this paper will assist staff in properly identifying MPMs and measures that are designed to limit capital flows and to reduce systemic financial risk stemming from such flows (CFM/MPMs), and thereby ensure the appropriate application of the Fund’s frameworks, so that staff policy advice is consistent and well targeted. The Fund will continue to develop and share expertise in using MPMs, and integrate these findings into its surveillance and technical assistance, which should contribute to building international understanding and experience on these issues.

scholarly journals Domestic Institutions and the Bypass Effect of Financial Globalization

2010 ◽  
Vol 2 (4) ◽  
pp. 173-204 ◽  
Author(s):  
Jiandong Ju ◽  
Shang-Jin Wei
Keyword(s):  
Corporate Governance ◽  
Capital Flows ◽  
Financial System ◽  
Domestic Institutions ◽  
Financial Globalization ◽  
Domestic Investment ◽  
International Capital ◽  
Developed Country ◽  
Domestic Savings ◽  
Capital Outflows

This paper proposes a simple model to study how domestic institutions affect patterns of international capital flows. Inefficient financial system, and poor corporate governance, may be bypassed by two-way capital flows in which domestic savings leave the country in the form of financial capital outflows but domestic investment takes place via inward FDI. While financial globalization always improves the welfare of a developed country with a good financial system, its effect is ambiguous for a developing country with an inefficient financial sector or poor corporate governance. Interestingly, financial and property rights institutions can have opposite effects on capital flows. (JEL D02, E21, F21, F32, G34)

scholarly journals CENTRAL BANK POLICY MIX: KEY CONCEPTS AND INDONESIA’S EXPERIENCE

2016 ◽  
Vol 18 (4) ◽  
pp. 379-408
Author(s):  
Perry Warjiyo
Keyword(s):  
Central Bank ◽  
Capital Flows ◽  
Financial Stability ◽  
Financial System ◽  
System Stability ◽  
Decision Making Process ◽  
Policy Mix ◽  
Macroprudential Policy ◽  
Systemic Risks ◽  
Key Concepts

The global crisis brings about renewed reforms on central bank policy. First, in addition to the traditional mandate of price stability, there are strong supports for additional mandate of the central bank to promote financial system stability. Second, macroprudential policy is needed to address procyclicality and build-up systemic risks in the macro-financial linkages of financial system that in most cases precede and deepen financial crisis. Third, monetary and financial stability are also prone to volatility of capital flows, especially for the emerging countries, and thus there is a need to manage them. The challenge is how to mix the policies of monetary, macroprudential, and capital flows management to meet the renewed mandate of central bank on monetary and financial stability. This paper reviews theoretical underpinnings and provides key concepts to address the issues. We show that central bank policy mix is both conceptually coherent and practically implementable. We provide a concrete recommendation with a reference from Indonesia’s experience since 2010. We also raise a number of challenges from practical point of views, especially relating to decision making process, forecasting model, and communication, for the success of the policy mix.

Financial Development and Economic Growth

2015 ◽  
pp. 24-37
Author(s):  
Dimitrios Nikolaou Koumparoulis
Keyword(s):  
Economic Growth ◽  
Financial Development ◽  
Capital Flows ◽  
Final Section ◽  
Financial System ◽  
Developed Countries ◽  
Critical Studies ◽  
The Developed Countries ◽  
The Relationship

In this chapter, the author examines the relationship between financial development and economic growth. In the first three sections of the chapter, they present the expansionary policies in the developed countries that led to increased capital flows in the last decades. Such an analysis was done through a thorough review of both empirical and other critical studies from distinguished academics. In the final section, a new financial system at the service of society and development with a case study for Greece is illustrated.

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