Globalisation and capital flows: unfinished business in the international financial architecture

This paper argues that the rules, procedures and understandings that surround international financial flows are inadequate. The paper advocates limiting short-term capital inflows and strengthening international crisis management measures. International capital flows can be very volatile: capital reversals were a central element in the Asian crisis of 1997-8.  International financial flows to the crisis countries since then have been relatively modest until now, but some East Asian countries are beginning to experience some of the symptoms of the problems which preceded the Asian crisis. This paper argues that the rules, procedures and understandings that surround international financial flows are inadequate. The paper advocates limiting short-term capital inflows and strengthening international crisis management measures