IMPLEMENTATION OF CONTROL ON CAPITAL FLOWS: INSTITUTIONAL VIEW AND POSSIBILITIES OF UKRAINE

The article considers the fundamental possibilities of using measures to regulate international capital flows within the framework of the existing paradigm and policies of international financial institutions, on which developing economies depend economically and politically. The need to develop a policy for regulating capital flows is caused by the large volumes of short-term volatile capital flows that provide a powerful negative impact on the financial stability of small open economies. According to the analysis, new trends are noted for a change in the IMF's institutional approach in favor of using capital flow control instruments. It is noted that the objective need for monitoring capital flows, which are characterized by the risk of tax avoiding or a violation of the financial stability state, is also provided for in the EU right field. The characteristic risks of uncontrolled movement of capital flows in small open economies are indicated. The recommendations presented in the article include the justification of the possibilities, in accordance with the new approach of the IMF and the existing EU practice, to pursue a policy of controlling the international capital flows in Ukraine due to the interests of ensuring financial stability without causing conflicts with MFIs and the European integration process. It is also justified that the negative influence of volatile capital flows, such as undesirable fluctuations exchange rate of national currency and procyclical overheating of the economy, require the recovering of foreign exchange regulation, given its important role in preventing the negative impact of volatile capital flows.