IMF Draft Rules Endorse Capital Controls as Last Resort

Nations should be able to use capital controls as a last resort to manage inflows of money that threaten their financial stability, according to draft guidelines discussed last week by the board of the International Monetary Fund.

Such controls should be applied only after countries strengthen their banking systems and adopt economic measures such as building up reserves, tightening fiscal policies and lowering central bank interest rates, according to the draft guidelines, obtained by Bloomberg News.