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Chartpack

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