BERLIN (MNI) – The German Bundesbank on Monday warned against
restricting international capital flows in response to the crisis,
arguing that doing so could harm the global economic recovery.
“The renewed debate about advantages of capital flow restrictions
carries the risk that in some countries interference in international
currency relations will be justified by pointing to domestic interests,”
the central bank wrote in its latest monthly report.
If many countries turned to such measures “the risk cannot be
dismissed that as a result of pursuing particular national interests the
international currency structure will be damaged,” the Bundesbank
cautioned.
“It is a lesson from the experiences in the global economic crisis
of the 1930s that such a development must be prevented by all means,”
the central bank stressed.
The Bundesbank called it a “success” that in the current crisis
there has been only sporadic interference in the currency system. This
has prevented currency policy conflicts which would have hindered the
global economic recovery, it said.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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