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Journal of Economic Integration 2000 December;15(4) :602-628.
The Effectiveness of Capital Controls: The Case of Slovenia

Claudia M. Buch Elke Hanschel 

The Kiel Institute of World Economics
Swiss Federal Finance Adminstration
Copyright ©2000 Journal of Economic Integration
Similar to Chile in the 1990s, Slovenia has introduced an unremunerated reserve requirement (URR) on financial credits in 1995. We find that the URR has not been effective in reducing overall inflows of foreign capital. Hence, the gain in monetary autonomy has been limited. While the overall structure of capital inflows has not differed decidedly from that of other transition economies, Slovenia has raised less short-term bank credit from abroad. Moreover, there are indications that the volatility of exchange rates has declined after the imposition of the URR while the volatility of capital flows has increased
Keywords: Slovenia | Capital Controls
1. Cordoso, E., and I. Goldfajn (1998), "Capital Flows to Brazil The Endogeneity of Capital Controls," IMF Staff Papers 1(45), 161-198.
2. Cumby, R.E., and M. Obstfeld (1981), "Capital Mobility and the Scope for Sterilization: Mexico in the 1970s," International Finance Discussion Paper 187.
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