The overall impact of QE2 may be more modest than previous interventions when market dislocations were more severe. 4 The Bank of Canada anticipated the Fed’s latest move when we published our October projection (not hard to do, given the openness with which the Fed discussed its plans). Overall, we expect the net impact on Canadian GDP to be positive but small.
But it is also useful to state an obvious but often overlooked fact: Unlike restrictions on the current account, the imposition of capital flow measures is not under the jurisdiction of the IMF, thus, any country can basically adopt such controls as it deems necessary to regulate capital movements.