Much talk, little effect from U.N. emerging market report

A United Nations report urging emerging markets to adopt capital controls to avoid having institutional flows whipsaw their currencies will buttress the arguments of a handful of countries that use controls, but is not likely to have a huge impact. Jose Ocampo, who recently left his post as the UN's under secretary-general for economic and social affairs, said that emerging economies need to use capital controls to manage excessive portfolio flows. Unfortunately, most long-term foreign investors do not share his views. While it is important for emerging markets to carefully manage the opening of their economies to international portfolio flows, it is hard to defend the introduction of capital controls.