A “Capital Controls for Dummies” could have been handy
The recent and so painfully bungled efforts with capital controls in Thailand is a perfect example of what I mean. Although the IMF has after decades of predicating open capital markets with no levees for many years now realized that the small economies might in fact be too exposed to the financial tsunamis the global oceans can create, it has yet been incapable to workout anything like a “capital control for dummies”, which could have been quite handy for Thailand. Of course, just in case, I am not thereby implying that those in Thailand are “dummies”, but only that they should have been better helped by those who present themselves as “experts”.
And let us not forget how the financial regulators, by arrogantly deciding they could eliminate risks from the banks, have just driven the risks underground, where these are now waiting to explode. Although they created the bombs, do they now have the humility required so as to be helpful in disarming them? I am not so sure.