Capital Control

Any measure taken by a government, central bank or other regulatory body to limit the flow of foreign capital in and out of the domestic economy. This includes taxes, tariffs, outright legislation and volume restrictions, as well as market-based forces. Capital controls can affect many asset classes such as equities, bonds and foreign exchange trades.

Tight capital controls are most often found in developing economies, where the capital reserves are lower and more susceptible to volatility.

Capital controls are the subject of much debate; some feel that they inherently limit economic progress and efficiency while others see them as prudent, adding a measure of safety to the economy. Most of the largest economies have a liberal policy of capital control, having phased out stricter rules from the past. But most of these same economies have basic stopgap measures in place to prevent against a mass exodus of capital (outflows) during a time of crisis or a massive speculative assault on the currency.

Global factors, like globalization and the integration of financial markets, have contributed to an overall easing of capital controls. Opening up an economy to foreign capital generally allows for companies to have easier access to capital, and can raise overall demand for domestic stocks.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Capital control — In economics, capital control is the monetary policy device that a country s government (i.e., sovereign power) uses to regulate the flows into and out of a country s capital account, i.e., the flows of investment oriented money into and out of a …   Wikipedia

  • Capital account — In financial accounting, the capital account is one of the accounts in shareholders equity. Sole proprietorships have a single capital account in the owner s equity. Partnerships maintain a capital account for each of the partners. In economics,… …   Wikipedia

  • control — (Del fr. controle, doble registro, contracción de contrerole < role, registro.) ► sustantivo masculino 1 Acción o resultado de comprobar o examinar una cosa: ■ lleva el control de mercancías; la policía está realizando controles en todas las… …   Enciclopedia Universal

  • Capital, Volume I — is the first of three volumes in Karl Marx s monumental work, Das Kapital, and the only volume to be published during his lifetime. Originally published in 1867, Marx s aim in Capital, Volume I is to uncover and explain the laws specific to the… …   Wikipedia

  • Capital Mechanized Infantry Division (Republic of Korea) — Capital Division Active 20 June 1948 present Country …   Wikipedia

  • Capital punishment in the Republic of China — Capital punishment is a legal form of punishment in the Republic of China (Taiwan). Before 2000, Taiwan had a relatively high execution rate [http://fju.lawbank.com.tw/room reply.asp?tpid=395 tid=128] when some strict laws were still in effect in …   Wikipedia

  • Control premium — is an amount that a buyer is usually willing to pay over the current market price of a publicly traded company. Contrary to a widely held view, this premium is not justified by the expected synergies, such as the expected increase in cash flow… …   Wikipedia

  • Capital Cities Communications — Capital Cities redirects here. For the article about the seat of a government, see Capital. Capital Cities Communications (sometimes referred to as CapCities ) was an American media company best known for its surprise purchase of the much larger… …   Wikipedia

  • Capital punishment in Oregon — Capital punishment is legal in the U.S. state of Oregon. The first execution under the territorial government was in 1851. Capital punishment was made explicitly legal by statute in 1864, and executions have been carried out exclusively at the… …   Wikipedia

  • Capital Area Transit (Harrisburg) — Capital Area Transit Founded 1973 Headquarters 901 North Cameron St. Locale Harrisburg, PA Service area …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.