Date of publication:
10 July 2017

Interventions from the 2016 OECD High-Level Seminar

This collection compiles the contributions of senior policy experts, academics, and economic practitioners on developments in the financial integration and financial regulation of cross-border capital flows since the 2008 global financial crisis at the OECD High-Level Seminar “Open and Orderly Capital Movements” held in October 2016.

The long-term move towards capital account openness among large emerging markets, the role of macroprudential measures in minimising systemic risk associated with large capital flow volatility, the avenues of reconciling individual country regulatory objectives and the collective interest of open and deep capital markets are discussed. The contributions also consider how the OECD Code of Liberalisation of Capital Movements may be further developed into an inclusive multilateral framework to support a resilient and open global financial system and ultimately robust investment and growth.

An open, transparent and orderly international system of capital flows underpins growth and stability. In an increasingly interconnected world economy, faced with episodes of heightened capital flow volatility, significant value is attached to a credible commitment mechanism that is sensitive both to the need to keep investment flowing but also to ensure financial stability concerns are addressed. A rule-based, co-operative framework for capital flow policies can help countries maintain market confidence and continue to attract the capital needed to support inclusive growth and sustainable development.

The OECD Code of Liberalisation of Capital Movements provides such a framework. As an instrument that encourages co-operation, it has provided a tried and tested process for global dialogue for over 50 years. Currently adhered to by all thirty-five OECD countries (including twelve G20 countries), and open to adherence by non-OECD countries, the OECD Code is the sole multilateral agreement among State parties dedicated to openness and transparency in cross-border capital flow policies. While there is no presumption that full liberalisation is an appropriate goal for all countries at all times, the OECD Code is based on the premise that long-term business investment and growth potential cannot be achieved with closed capital accounts and that “beggar-thy-neighbour” approaches to capital flow policies can result in negative collective outcomes.