Lost amid the hoopla over the Fed's decision to
raise its discount rate on Friday was the
dramatic about-face by the International Monetary Fund. After years of free-market orthodoxy on open capital markets, the IMF is now recommending that developing nations consider adopting measures to r
egulate the flow of hot money in and out of their economies, or capital controls.
That's also the gist of a
recent speech by Lord Adair Turner, Chairman of the UK's Financial Services Authority, at the Reserve Bank of India. A long, but interesting, read. And a reminder of how dramatically the crisis is changing the intellectual climate on capital markets regulation.
