What Are Capital Controls?

By Kavaljit Singh | Policy Brief # 1 | January 2, 2019

Capital controls are back in fashion. In the aftermath of the 2008 global financial crisis, there is a renewed interest in capital controls as useful policy tools to prevent or mitigate financial crises. It is increasingly being acknowledged in policy circles that capital controls could insulate the domestic economy from volatile capital flows, due to the limited effectiveness of other policy measures (such as sterilization of capital flows and accumulation of foreign reserves). As many complexities are surrounding the issue of capital controls, the first policy brief explains what…

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How to Prevent Financial Crises in Emerging Markets?

By Kavaljit Singh | Briefing Paper # 23 | September 4, 2018

Argentina’s currency crisis is deepening. On August 29, the peso crashed more than 7 percent – the biggest one-day fall since December 2015 when President Mauricio Macri allowed the currency to float freely and removed capital controls. In a two-minute televised address on that day, Mr Macri said he had requested the International Monetary Fund to early release funds from a $50 billion stand-by arrangement. The televised address by President Macri did not help to eliminate market uncertainty. Instead, it made investors more jittery than ever, pushing the…

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The Future of Financial Services after Brexit: Options and Limitations

By Kavaljit Singh | Briefing Paper # 22 | February 2018

After making sufficient progress on the terms of the UK’s exit from the European Union, negotiations will now move on the thorny issue of forging a future UK-EU trade and investment relationship. The negotiations on the future relationship will resume once the EU leaders adopt guidelines at an EU summit to be held in Brussels during March 22-23, 2018. For the UK, the second phase of Brexit negotiations will be much more difficult than the phase one agreement concluded in December 2017.

As planned, the UK will formally leave the…

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Electronic Commerce and the WTO: The Changing Contours of Engagement

By Biswajit Dhar | Briefing Paper # 21 | November 2017

Electronic Commerce (e-commerce) has emerged as a key issue in the run-up to the 11th Ministerial Conference of the World Trade Organization (WTO) to be held in Buenos Aires in December 2017. A number of countries across the development spectrum have backed inclusion of e-commerce in the WTO. Although the nature of disciplines that these countries favour is not entirely clear, yet the proposals strongly suggest that they would prefer using e-commerce as a vehicle for trade liberalisation in goods and services.

The issue of e-commerce was introduced in the…

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Institutional Investors in Indian Commodity Derivatives Market: For Whose Benefit?

By Kavaljit Singh | Briefing Paper # 20 | October 4, 2017

A major policy shift has been taking place in the Indian commodity derivatives market since September 2015, when the commodity regulatory body, Forward Markets Commission, was formally merged with the capital market regulator – the Securities and Exchange Board of India (SEBI). In June 2017, SEBI opened up the commodity derivatives markets to institutional investors for the first time by allowing hedge funds registered as category III Alternative Investment Funds (AIFs) to invest in commodity derivatives as ‘clients’.1

The category III AIFs raise money from high net worth individuals and…

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