The workshop was organized jointly by UNCTAD and Boston University's Global Economic Governance Initiative (GEGI), with support from the Ford Foundation. It brought together policy makers, negotiators and experts to assess the rationale for and recent experience with capital account regulations and discuss what changes in global governance structures might be needed to facilitate re-regulation of cross-border finance.
Richard Kozul-Wright, Head of the Unit on Economic Integration and Cooperation Among Developing Countries of the United Nations Conference on Trade and Development (UNCTAD), and Kevin P. Gallagher, co-director of the Global Economic Governance Initiative (GEGI) in Boston University, opened the workshop and briefly introduced the issues to be discussed.
Cross border capital flows constitute a key economic phenomenon in understanding the roots of the 2008 financial crisis that affected many advanced economies and the turbulent economic environment emerging economies have been facing since then. In response to the surge in private capital inflows in the aftermath of the crisis policy makers in emerging countries have increasingly made use of capital account regulation (CAR) and unlike in the past decades, the richest countries could not prevent its implementation.
The analysis of capital flows cannot be disentangled from other international phenomena, like trade and financial stability issues. Moreover, individual country experiences have become an important input to enrich reflection on capital flows regulation. These two reasons make international organizations a suitable forum to host this workshop.
UNCTAD is especially concerned about capital account regulation. It has been engaged in this debate for over a decade, analyzing the costs implied by the free movement of capital flows and the role of international institutions in promoting financial stability. One of the most relevant issues to be discussed in this regard is how much available policy space there is for capital account regulation under the current international trade and investment legal framework. It is sensible thus for this debate to take place in Geneva, and have a panel session organized in the head office of the World Trade Organization (WTO).