The recent sell-off in emerging markets is a classic case, be careful what you wish for.
When the Fed increased its asset purchases to support the weak U.S. economy, many foreign officials criticized the United States for their money, put undue upward pressure. The most memorable is ? Brazilian Finance Minister Guido Mantega (Guido Mantega) suggested wealthy nations engaged in the "currency war" or competitive devaluations to gain trade advantages.
Now, the Fed toward a template of its bond purchase program, has begun in emerging market currencies fell sharply, and there are growing concerns about a possible crisis.
Indian and Turkish lira has been reduced to a record low, while the Indonesian rupiah against the U.S. dollar has hit a four-year low. Mexico and South Korea are facing pressure because Brazil, the company raised $ 6 billion last week to curb real slide.
These pressures risks snowballing crisis sweeping the world economy this year, the Fed Jackson Hole conference, the theme of monetary policy at the global level more emphasis.
Central bank governors from around the world attended the meeting, parcels on Saturday, their conclusions are staggering: in the United States and other developed countries unconventional monetary policy, applies to both domestic objectives, there can be a lot of spillover effects.
And, for better or worse, these policies - such as the Fed's bond-buying and near-zero interest rates - has prompted the need for developing countries to create their own unconventional instruments, control of the money flow.
But there are differences in the degree of central bankers in rich countries should pay attention to the impact of their policies abroad, rather than just focusing on the country's economic goals, always the case.
Mexican central bank governor Agustin Carstens, that in rich countries, the central bank can not be carried out in a vacuum policy, must keep in mind the international influence or trigger another financial crisis risks.
Carstens mismanagement exit unconventional monetary policy in countries like the United States will bring the risk of developing warned.
"It would be desirable to achieve a more developed economies foreseeable exports," he said at a panel discussion on Friday. "Better communication, speak with one voice, it is very important."
Minding our own business
Fed officials, current and former policy of giving them heavier international influence, showing little interest. The Fed has purchased $ 8.5 billion worth of bonds each month, but plans to scale back in the end, will buy 2014 interim stops.
"We have to develop national policies to improve the U.S. economy, and not a lot of scope to go outside to consider the set," Federal Reserve Bank of Atlanta President Dennis Lockhart told Reuters on Saturday. "But if (U.S. policymakers) see the real global risks, and said it would be a second-order effects on the domestic economy, then, obviously can be considered, I will consider it."
Cohen (Donald Kohn), former Fed vice chairman and current Chairman Ben Bernanke's term ends in January, to refute claims that may be too loose global monetary policy when the candidates for the highest office on the grounds that the unemployment rate rose in rich countries high.
He suggested that the lack of flexible exchange rates, in some countries, such as China, other emerging economies means that the Fed's policy had to bear the brunt of the adverse effects.
"America's monetary policy is one way to spread resistance to other countries through the exchange rate appreciation," he said.
Improve SHIELDS
Discussion turned to emerging countries into what can be done to isolate the ripples from the Fed policy.
Paper presented requirements poorer countries to take the so-called macro-prudential policy, from the very targeted credit and leverage, capital controls more thorough restrictions to mitigate exchange rate fluctuations and investment.
"Macro-prudential policies are necessary to restore the independence of monetary policy non-central state, wrote:" Helen Rey, professor at London Business School. "They can substitute capital controls, but if they are not enough, capital controls must also be considered."
Lagarde (Christine Lagarde), International Monetary Fund (IMF) managing director, agreed that in some cases, you may need capital controls, but said they should not be the first line of defense. International Monetary Fund (IMF) has long standing barriers to capital flows, but in the 2007-2009 financial crisis, has evolved its views.
Many analysts worry that the efficacy of such a policy has a long history around the world, often by revealing a country's financial weakness, attracting speculators, rather than deter their intervention in the foreign exchange market failure.
Brazil's central bank vice governor, has used capital controls to curb the rapid inflow in recent years, it may help them to exercise pressure on the currency, is now facing the country. Luis Pereira struck a lighter note, making his point.
"If you throw a party, you want to be more selective in allowing guests to your party, there may be fewer people you will run out the door," if something goes terribly wrong, he said.
If no limits are placed on the guest list, he continued, "The party gets too wild too soon."
"When you try to select your guests, you want to stay longer without getting too drunk."



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