However, it needs reiterating that no policy instrument is clearly off the table and our choice of instruments will be determined by the context. 11. The recent crisis has clearly been a turning point in the world view on capital controls. The Asian crisis of the mid-90s demonstrated the risk of instability inherent in a fully open capital account.
Even so, the intellectual orthodoxy continued to denounce controls on capital flows as being inefficient and ineffective. The recent crisis saw, across emerging economies, a rough correlation between the extent of openness of the capital account and the extent of adverse impact of the crisis.