Economics
Bloomberg View: How to Slow the Flow of Hot Money
To make capital controls more effective, the world needs a new set of rules
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Until recently, respectable opinion frowned on all barriers to money flowing across borders. Today, the old thinking has been overturned. Sometimes, it’s agreed, capital controls are necessary.
The old consensus was wrong and won’t be missed. The new view, however, lacks clarity and, when it comes to application, effective oversight. Capital controls may sometimes be necessary—but they’re always dangerous and open to abuse. These policies need to be better considered and subject to more careful global supervision.