Consideration should always be given to adjusting monetary, exchange rate and fiscal policy, consistent with budgetary and inflation conditions. 3. Principles to guide the design of measures: a)  Temporary. Time-limiting measures recognize that capital controls create distortions, adverse market reactions and negative externalities, as well as the reality that, over time, controls are often evaded.
This principle is also consistent with the positive longer-term fundamentals that are driving capital flows to emerging market economies. b)  Targeted. Measures should address specific vulnerabilities, such as Korea’s restrictions on foreign exchange derivative contracts. 12  R. Zoellick, “A Monetary Regime for a Multipolar World,” Financial Times, 17 February 2011.