Macroprudential regulation: potential implications of rules for cross-border banking

Capital controls, prudential regulation and GATS rules

Since the completion, in 1997, of the negotiation of commitments on international trade in financial services under the GATS, several organisations and commentators have raised questions as to what prudential measures are covered by the Prudential Defence Measure (PDM) of the Annex on Financial Services of the GATS, and as to whether the PDM together with other GATS rules provide adequate scope for the use of capital controls.