About the Conference

About RBI-ADB Conference on Management of Capital Flows

November 19~20, 2012

During the past decade, the global gross capital flows increased substantially, indicating growing interconnectedness, particularly between advanced economies and emerging market economies. These flows were driven by a "search for yield" and aided by some reduction in regulatory barriers, and were increasing till 2007, before contracting sharply in the aftermath of the global financial crisis. Moreover, the capital flows tended to be volatile, and posed significant challenges to central bankers. With the onset of the global crisis, and increase in the volatility of capital flows, the pace of both tightening and easing measures related to capital flows has picked up. With the increasing challenges posed by capital flows particularly for the monetary policymakers, there has also been considerable research on the subject.

     The present Conference on Management of Capital Flows, jointly organised by Reserve Bank of India and the Asian Development Bank in Mumbai, India, during November 19-20, 2012 is an attempt to understand the issues in capital flows management and provide policy-relevant inputs for practitioners. This Conference will provide the participants with an opportunity to examine what drives capital flows, why are they so volatile, how to design the policies to address them and what are the challenges for capital account management particularly in EMEs. The participants include senior central bankers, academics, representatives of multilateral institutions and private sector experts.

     The Conference will have three technical sessions on the first day, followed by two panel discussions on the second day. The technical sessions will focus on (i) compositional shift and volatility of capital flows; (ii) challenges of capital account management; and (iii) select country experiences regarding objectives of capital flows management (CFM), instruments and their effectiveness. Eminent economists from across the globe will present papers and be discussants on the papers presented. The country perspectives are expected to provide useful input for understanding capital account management matrix, insights into best international practices and policy inputs for practitioners of central banking. The three technical sessions will be followed by two panel discussions on the second day of the Conference. The panelists will be deputy governors and senior central bankers having experience in the management of capital flows.

     The panel discussions will debate on various issues such as whether capital controls minimise volatility; what additional instruments are required to deal with volatility; how to distinguish between capital controls and macro-prudential tools; whether capital flow management is required in source countries; reserve adequacy in the backdrop of capital flow volatility; is there a need to change the approach to capital account liberalization; changes required in the international financial architecture to manage capital flow volatility; and, do regional financial arrangements help in periods of capital flow volatility.