OECD warns against capital controls

The OECD said on Thursday that increased global capital flows are positive and that the risks involved can be managed by prudent regulation and without the use of capital controls. The OECD, which groups the world's most advanced economies, in a report entitled "Getting the Most Out of International Capital Flows" - encouraged countries to take advantage of new opportunities for long-term growth. It also recognised "that global financial integration can leave economies more vulnerable to risks at both the national and global level," it said in a statement.
Accordingly, the risks "posed by increasing capital flows require a co-ordinated package of macroeconomic, prudential and structural policies, with capital controls only to be considered as a last resort." Large, uncontrolled capital flows around the world have been cited as some as a major risk to growth because of the distortions they can cause, especially in developing countries.