capital flight

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Capital flight

The transfer of capital abroad in response to fears of political risk.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Capital Flight

A situation in which foreign investors remove their investments from a particular country because of some increase in country risk. Capital flight may occur because of government instability, the sudden appearance of high inflation, or because another country's government offers a better deal. Governments almost always try to prevent capital flight from occurring, but this is not always possible. See also: Foreign direct investment.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

capital flight

The shifting of funds out of a country to avoid confiscation, controls, or depreciation. Capital flight results in further deterioration of a currency's exchange rate.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
There are no plans to curb flight of capital and money laundering and instead efforts to regularise these irregularities.
According to PAGE source, ABAD has demanded to withdraw this mechanism for valuation of immovable property, which has created panic in investors and caused for flight of capital from construction and real estate.
News that the US central bank would keep borrowing costs at zero was broadly welcomed across Asia, with most stock markets up, as it eased concerns about a feared flight of capital from the region's struggling economies.
The flight of capital, which could have otherwise been deployed to productive investment domestically, has worsened the investment outlook.
Even then there were periods when the country had political stability and flight of capital slowed substantially while direct foreign investment (DFI) inflows were huge.
Many people especially Saudis criticize this trend as "flight of capital" from their country.
Fearing a flight of capital from Scotland's big banks, the governor revealed, under questioning, that he has contingency plans in place to stand behind them in the financial turmoil that would follow a Yes vote.
For the first time, the EU sought to hobble broad swaths of Russian industry with the goal of accelerating the flight of capital from the $2 trillion economy.
Experts say that black money stashed away in banks abroad is hindrance in India's economic growth and this flight of capital has only helped widen inequality in this country.
Mr Shapps said: "Their regional managing director in Wales actually said last year: 'As a Welshman this situation is deeply disappointing for me, and as a businessman in Wales hugely concerning...He said: "There is a major risk - actually it is already happening - of a flight of capital that would have gone into Wales going elsewhere."
Hitting out at the Congress on corruption which, he said, touched an all- time high, the BJP leader highlighted the 2G spectrum allocation, coal block allocation, Commonwealth Games and VVIP chopper scams which " brought down the image of the country, leading to decline on investment and flight of capital." He added that the UPA inherited a robust economy with 8.4 per cent growth in May 2004 but had left it shattered with growth rate of less than 5 per cent and high inflation.
This flight of capital caused a temporary liquidity crunch, he added.