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We study how capital controls and domestic macroprudential policy tame credit supply booms, respectively targeting foreign and domestic bank debt. For identification, we exploit the simultaneous introduction of capital controls on foreign exchange (FX) debt inflows and an increase of reserve requirements on domestic bank deposits in Colombia during a strong credit boom, as well as credit registry and bank balance sheet data. Our results suggest that first, an increase in the local monetary policy rate, raising the interest rate spread with the United States, allows more FX-indebted banks to carry trade cheap FX funds with more expensive peso lending, especially toward riskier, opaque firms. Capital controls tax FX debt and break the carry trade. Second, the increase in reserve requirements on domestic deposits directly reduces credit supply, and more so for riskier, opaque firms, rather than enhances the transmission of monetary rates on credit supply. Importantly, different banks finance credit in the boom with either domestic or foreign (FX) financing. Hence, capital controls and domestic macroprudential policy complementarily mitigate the boom and the associated risk-taking through two distinct channels. ; Project supported by a 2018 Leonardo Grant for Researchers and Cultural Creators, BBVA Foundation, by the European Research Council (ERC) under the European Union's Horizon 2020 research and innovation programme (grant agreement No 648398), from the PGC2018-102133-B-I00 (MCIU/AEI/FEDER, UE) grant and the Spanish Ministry of Economy and Competitiveness, through the Severo Ochoa Programme for Centres of Excellence in R&D (SEV-2015-0563)

Non-US firms have massively borrowed dollars (foreign currency, FX), which may lead to booms and crises. We show the real effects of capital controls, including prudential benefits, through a firm-debt mechanism. Our identification exploits the introduction of a tax on FX-debt inflows in Colombia before the global financial crisis (GFC), and administrative, proprietary datasets, including loan-level credit register data and firm-level information on FX-debt inflows and imports/exports. Our results show that capital controls substantially reduce FX-debt inflows, particularly for firms with larger ex-ante FX-debt exposure. Moreover, firms with weaker local banking relationships cannot substitute FX-debt with domestic-debt and experience a reduction in total debt and imports upon implementation of the policy. However, our results suggest that, by preemptively reducing pre-crisis firm-level debt, capital controls boost exports during the subsequent GFC, especially among financially-constrained firms. ; Project supported by a 2018 Leonardo Grant for Researchers and Cultural Creators, BBVA Foundation. This project has received funding from the European Research Council (ERC) under the European Union's Horizon 2020 research and innovation programme (grant agreement No 648398). Peydró also acknowledges financial support from the PGC2018-102133-B-I00 (MCIU/AEI/FEDER, UE) grant and the Spanish Ministry of Economy and Competitiveness, through the Severo Ochoa Programme for Centres of Excellence in R&D (SEV-2015-0563)

AbstractAxis 4 of the European Fisheries Fund (2007–2013) offers a new means of support to the fisheries sector. Drawing on the experience from the rural LEADER programme it paves the way for integration of the fisheries sector within the wider local economy. Implementation is devolved to Fisheries Local Action Groups (FLAGS), public‐private partnerships responsible for preparing a development strategy and the selection and co‐funding of projects initiated by local stakeholders that will deliver the strategic objectives. The Pays d'Auray on Brittany's south coast – important for both sea fisheries and shellfish cultivation – has undergone extensive urbanisation and tourism development leading to space use conflicts and increased pressure on local ecosystem services. The article examines a selection of projects that demonstrate how the local fishing industry, business community and conservation interests are coming together to address the problems and so enhance the area's environmental image and lay the foundations for sustainable development of the fisheries sector.