The second CGFS initiative is to examine what kind of aggregate information about exposures would help to improve the functioning of markets, taking as a starting-point the BIS international banking statistics. Having adequate knowledge about short-term capital flows is one thing. Establishing an exchange regime to minimise their disruptive effects, while maintaining their longer-run efficiency benefits, is quite another.
As already stated, a country cannot have completely liberalised capital flows (assuming a high degree of substitutability between domestic and foreign assets), a fixed exchange rate regime and an independent monetary policy. The events in Asia and more recently in Latin America have highlighted the need for trade-offs, but have not provided guidance as to optimal solutions.