ECONOMIC

TABLE 54.—Major changes in capital controls, 1973CountryControls on banks and otherfinancial intermediariesControls on portfolioinvestmentControls on directinvestmentAustralia.February—broadened coverageof restrictions on borrowingabroad.October—increase from 25 to33^ percent in noninterest-bearingdeposits requiredon borrowings fromabroad with a maturity inexcess of 2 year?.March—general ban on foreigninvestment in Australianreal estate.Belgium.March to early Septembernegativeinterest rate of 14percent per week on nonresidentconvertible francholdings exceeding thedaily average in the lastquarter of 1972.Late September—negative interestrate reimposed.Canada.December—act calling forscreening of new foreigndirect investments in Canadapassed.France.March to early October—prohibitionof interest paymentson nonresident francdeposits of less than 180days; increase (to 100 percent)in mandatory reserverequirements on excess ofthese deposits above theirJan. 4 level.March—restriction on banks'forward exchange transactionswith nonresidents.April to late October—banksallowed to impose a negativeinterest rate of 0.75percent per month on theincrease in nonresidentfranc deposits above theJanuary 4 level.September—banks prohibitedfrom lending francsto nonresidents.March to early October—nonresidentpurchases of shorttermsecurities prohibited.Germany.February 4-prior authorizationrequired (and as a rule notgiven) for contracting offoreign loans and credits inexcess of DM 50,000.February 24—Governmentempowered to raise thecash deposit requirementagainst foreign borrowingfrom 50 to 100 percent(authority not yet invoked).July 1 to October 1—minimumreserve requirementsagainst foreign liabilitieseffectively increased to90-100 percent, as opposedto 8-20 percent on domesticliabilities.February—new restrictionson sale of domestic securitiesto nonresidents.February—authorization requirementfor nonresidentdirect investment valued inexcess of DM 500,000.Italy.July—blocked noninterestbearing deposit of 50 percent(25 percent for mutualfunds) required on portfolioinvestments abroad.July—similar deposit requiredon direct investmentsabroad.Japan.May—increase from 70 to 90percent in allowable foreigncurrency financing of externaloperations, includingdirect investments overseas,purchases of realestate abroad, and prepaymentsfor imports.May—relaxation of controlsgoverning acquisition ofJapanese securities byforeign investors, and acquisitionof foreign securitiesby Japanese investors.May—continued relaxation ofcontrols on direct foreigninvestment in Japan. Withsome exceptions, virtuallyall industries will be fullyopen to foreign ownershipby the end of 1975.198