Capital Flows and International Financial Architecture

By Eiji Ogawa and Junko Shimizu


Capital flows are affected by external factors as well as domestic factors. The monetary authorities should have a closer and timely observation of market participants’ expectation of US interest rates and their global risk aversion. They should cope with contagion effects in capital flows among emerging market countries at a regional and global levels. For the purpose, they should secure and promote international cooperation for crisis prevention and management. In order to gather the latest information on capital flows and others to be monitored, they should have specific surveillance collaboration between the IMF and reginal surveillance organizations.