Financial Regulatory Forum

By Kevin Plumberg

HONG KONG, July 5 (Reuters) – Having learned lessons from the past, emerging Asia is showing caution about adopting heavy-handed capital controls to curb heavy investment inflows and is focusing instead on closing economically disruptive loopholes.

Measures announced by Indonesia and South Korea last month targetted particular areas of their markets, unlike Thailand in 2006 which effectively imposed a blanket tax on foreign investment. A Reuters poll suggests further targetted measures can be expected from the region.

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By Victoria Bi and Karen Yeung

SHANGHAI, Jan 26 (Reuters) – Fears of more Chinese policy tightening spooked global markets on Tuesday after Beijing ordered some banks to comply immediately with a planned increase in reserves and a report suggested earlier attempts at curbing lending had failed.

The developments prompted concern that the central bank would get more aggressive about reining in credit to fend off inflation and asset bubbles, potentially dragging on growth in the world’s third-largest economy.

China implemented a planned increase in required reserves for some banks on Tuesday, sources said, sparking heavy selling of Asian stocks that underscored how sensitive global investors are becoming to Beijing’s tightening of monetary policy.

MOSCOW, Dec 31 (Reuters) – Russia will step up its efforts to curb the influx of speculative capital, which can flee the country with the “first rain,” Prime Minister Vladimir Putin said this week, adding the measures will be moderate.

“There will be no revolutions,” Putin said.

Nonetheless, his remarks pushed the rouble considerably down, as investors were easily spooked by hint the government might take steps soon.

The comments have intensified the talk on capital controls, which began earlier this autumn when a new wave of short-term capital entered the Russian forex market, driving the rouble rapidly up.