: review of experience with the institutional view, published in december 2016, the average number of easing measures introduced between 2013 and 2016 amounted to 851, with almost 60 % representing easing by emerging market economies. china, colombia, india, indonesia, malaysia, south africa and thailand introduced about 127 easing measures. during the same period, only 233 tightening measures were introduced, with more than half representing emerging market economies. in order to rationalise this behaviour, it is perhaps at this point worth recapping some benefits of capital flows. countries with a liberalised capital account tend to be able to tap into foreign savings to invest in infrastructural projects that contribute to sustainable domestic employment creation and generate income to service the underlying debt. the other benefit relates to the typically ensuing technology transfer and financial market development and innovation that assist countries in increasing the absorption capacity of flows without distorting the macroeconomic fundamentals. needless to say, opening a country ’ s capital account also increases its vulnerability to the changing conditions in global financial markets. the most fundamental and intricate rule about the liberalisation of the capital account is that the process has to be well thought through in terms of timing and sequencing in order to minimise costs and unintended consequences. the manner in which these controls are eased should be tailored to a country ’ s specific circumstances and economic objectives. careful planning ensures that macroeconomic stability is maintained over time and that the benefits outweigh the costs. the imf has recommended a phased approach to capital flow liberalisation, prioritising the liberalisation of stable flows such as foreign direct investment, which are closely correlated with growth, before more volatile and short - term portfolio flows. it further recommends that the relaxation of controls on capital inflows be prioritised before capital outflows. as napoleon bonaparte once said : “ forethought we may have, undoubtedly, but not foresight. ” some countries which may have planned the process of capital account liberalisation and subsequently met some macroeconomic preconditions to liberalisation ( like strong and stable growth, low inflation, and high levels of foreign reserves ) might in retrospect discover that they have liberalised prematurely or too rapidly. while the liberalisation of the capital account is generally associated with the abolishing of capital flows measures that confine capital mobility, the reimposition of temporary controls in instances where the openness was prematurely or too rapidly undertaken or posed a risk to macroeconomic and / or

miroslav singer : the czech republic outside emu – a success story born from painful lessons. a czech view on resolving the euro crisis speech by mr miroslav singer, governor of the czech national bank, as part of the omfif ( official monetary and financial institutions forum ) golden series on world money, reform club, london, 28 june 2011. * * * a horrible end is better than endless horror. lieber ein ende mit schrecken als ein schrecken ohne ende. ferdinand von schill ( 1776 – 1808 ) ladies and gentlemen, as we all know, the eurozone is facing serious problems at the present time. it is my opinion that there are important lessons to be learned from the collapse of the bretton woods system in the early 1970s. the czech policy authorities learned these lessons – often the hard way – first of all after the split of czechoslovakia 1993, and again during the financial and currency crisis that hit the czech republic later in the same decade. in my speech today i will recall these lessons and examine how they can be applied in order to minimise the costs of resolving the eurozone debt crisis. before going any further, however, i ’ d like to draw your attention to four basic – and surprising, perhaps even shocking – facts about the czech republic. first of all, it may come as a shock to some of you to learn that the czech republic is not an eastern european country. in fact, its capital, prague, lies more than 90 miles west of vienna. in the words of a famous londoner – the actor michael caine – “ not a lot of people know that ”. what is more, the czech economy is further west than you might think not just geographically, but also economically. this brings me to shocking fact number two. despite tepid real growth averaging 3 %, the czech economy has grown by 10 % on average in recent years thanks to appreciation of its exchange rate. therefore, the czech economy has multiplied in size more than 4. 5 times since 1993 in nominal terms in euros. consequently, it could have bought on average more than 7 % p. a. of the core european countries ’ real gdp over the last 18 years. and now for shocking fact number three. despite, or maybe thanks to, our first - hand experience with financial crisis ( bad loans exceeded 40 % of gdp in the late 1990s ), no bailout has been needed and no taxpayers ’ money has been used to save any czech