§ Lord Juddasked Her Majesty's Government:
What is their policy towards the restriction of the movement of capital in poorer and more vulnerable countries of the world in order to prevent financial crises; and what they advocate as the appropriate policy of the International Monetary Fund in this respect. [HL130]
§ Lord McIntosh of HaringeyThe Government believe that open capital markets can bring huge economic benefits and support efforts to encourage orderly, progressive capital account liberalisation. The Government recognise that large short-term capital movements can be destabilising and believe that the benefits of liberalisation are best enjoyed in countries which have embarked upon properly sequenced economic reform. Sound macroeconomic policy, open and credible institutions and procedures and a healthy financial sector are essential pre-conditions for orderly capital account liberalisation.
At the Cologne Economic Summit, the UK Government and their G7 partners urged the IMF to continue its work on the appropriate pace and sequencing of capital market liberalisation and to explore other issues related to the fund's role in facilitating an orderly approach to liberalisation.