There is a renewed consensus on the need to re-regulate international capital movements. But there is a collective action problem, which puts developing countries at a particular disadvantage. Countries often have been reluctant to use capital controls, fearing a possible backlash from the markets, as was the case when Brazil implemented capital controls in the fall of 2009. Coordinated and concerted regulation
of capital account flows is therefore necessary. It is time too for the international community to support countries’ efforts, including facilitating regional coordination, in
the use of capital controls to stem the devastating impact of volatile private capital.