TRAC: a market-based tax on capital flight as an alternative to Grexit. CEPS Commentary, 7 May 2015

In this CEPS Commentary, Daniel Gros turns his attention to the main outstanding problem facing Greece today, namely capital flight. Fearful that the country will leave the euro, depositors are withdrawing cash from their bank accounts – thereby making this event more likely. He outlines a proposal in which outgoing payments from Greek banks in the form of cash or via the TARGET system would be limited to the amount of incoming payments, i.e. revenues from exports or tourism, via an auction system. Greece could remain formally a member of the euro area, but the price for cash withdrawals would encourage depositors to wait and stimulate exports.

Capital flows and monetary control under a domestic currency substitution regime: the recent Brazilian experience

The 90s have witnessed a resumption in capital flows to Latin America. due to the conjugation of low interest rates in the US and economic reforms in most LA countries. In Brazil. however. substantial capital flows have becn induced by the extremely high domestic interest rates practiced by the Central Bank as a measure of last reson given the absence of successful stabilization policies. These very high interest rates were needed to prevent capital flight in a context of a surprisingly stable inflation rate above 20% a month. and keep interest bearing govemment securities preferable to foreign assets as money substitutes. We carefully describe how this domestic currency substitution regime (interest bearing govemment securities are substituted for MIas cash holdings) requires the Central Bank to renounce aoy control over monerary aggregates. In this domestic currency substitution regime. hyperinflation is the most likely outcome of an isolated (i.e.. without fiscal adjusanents) attempt by the Brazilian Central Bank to control money.

Capital flows to Latin America: recent developments

Includes bibliography

Government Laws, Regulations and Policies: Small Fish in a Big Pond

Global development has, in recent years, been shaped by the rise of transnational capital. This has implications for the quality and effectiveness of those national laws, regulations and policies in place to monitor transnational capital, ensure that multi national organisations assume responsibility and hold them accountable should they fail to do so. In balancing these objectives, contrasting issues come to the fore, such as the fear of capital flight; an issue especially profound in small open economies where the balance may tip in the favour of retaining, as opposed to regulating, foreign capital.
This paper can be considered in three parts. First, the paper addresses the shift in global leadership from national governments to multinational corporations (with particular reference to the rise of the Transnational Capitalist Class). This shift will incorporate the connotations of the Third Way. In considering this ideology, it will propose the Third Way as a transition phase to a stage when government is more the “third wheel” than an equal partner in governance structures. Second, the implications of the changing nature of governance on the capacity of nation states to develop effective laws, regulations and policies is discussed which leads on to the third aspect of the paper which identifies the challenges for governments, business and society in reimagining the governance structure pertaining to law, regulation and policy and the need to reconsider existing structures in light of global shifts in power structures.
A new leadership structure, both within the national and international governance system has far reaching implications. Boundary constraints no longer an issue, the potential for equality and global democracy is huge. Instead, a post recessionary world faces new governance challenges in the shape of; legitimacy; accountability and responsibility. Capitalism has invaded government and the primary challenge will be in avoiding the same issues that have dogged our financial markets for the last number of years. The challenge then to laws, regulations and public policy is huge, especially considering that the governments regulating are smaller than those dictating agenda on a global level

Sur la dimension éthique de l’argent : les phénomènes de fuite et de blanchiment de capitaux au Maroc

Full Text / Article complet

Strengthening regional financial cooperation

Includes bibliography

Turkey's economy: a story of success with an uncertain future. OSW Commentary No. 120, 2013-11-05

In the decade since the Justice and Development Party (AKP) came to power, Turkey’s economy has become synonymous with success and well-implemented reforms. Economic development has been the basis of both socio-political stability inside the country and of an ambitious foreign policy agenda pursued by the AKP. However, the risks associated with a series of unresolved issues are becoming increasingly apparent. These include the country’s current account deficit, its over-reliance on short-term external financing, and unfinished reforms, for example of the education sector. This leaves Turkey exposed to over-dependence on investors, especially from the West. Consequently, Ankara has become a hostage of its own image as an economically successful state with a stable socio-political system. Any changes to this image would cause capital flight, as exemplified by the outflow of portfolio investment1 and an increase in the cost of external debt2 that followed the nationwide protests over the proposed closure of Gezi Park last summer. In addition, Turkey remains vulnerable to potential changes in investor sentiment towards emerging markets.

Predicamento de seguridad yemení

Con el inicio del periodo Post-Guerra Fría el Sistema Internacional comienza a experimentar un incremento en el fortalecimiento de su componente social; la Sociedad de Estados alcanza un mayor nivel de homogenización, el estado, unidad predominante de esta, comienzan atravesar una serie de transformaciones que obedecerán a una serie de cambios y continuidades respecto al periodo anterior. Desde la perspectiva del Realismo Subalterno de las Relaciones Internacionales se destacan el proceso de construcción de estado e inserción al sistema como las variables que determinan el sentimiento de inseguridad experimentado por las elites estatales del Tercer Mundo; procesos que en el contexto de un nuevo y turbulento periodo en el sistema, tomara algunas características particulares que darán un sentido especifico al sentimiento de inseguridad y las acciones a través de las cuales las elites buscan disminuirlo. La dimensión externa del sentimiento de inseguridad, el nuevo papel que toma la resistencia popular como factor determinante del sentimiento de inseguridad y de la cooperación, así como del conflicto, entre los miembros de la Sociedad Internacional, la inserción como promotor de estrategias de construcción de Estado, son alguno de los temas puntuales, que desde la perspectiva subalterna, parecen salir a flote tras el análisis del sistema en lo que se ha considerado como el periodo Post-Guerra Fría. En este sentido Yemen, se muestra como un caso adecuado no solo para poner a prueba las postulados de la teoría subalterna, veinte años después de su obra más prominente (The third world security Predicament), escrita por M. Ayoob, sino como un caso pertinente que permite acercarse más a la comprensión del papel del Tercer Mundo al interior de la Sociedad Internacional de Estados.