The challenges posed by large swings in capital flows were highlighted again with the Covid-19 crisis and the subsequent tightening cycle of monetary policies across advanced economies. The discussion will begin by gauging recent developments and trends in capital flows, and emerging risks. It will then transition to taking stock of the lessons learned so far in terms of policies that can help countries shield against the costs associated with reduced access to foreign capital, such as improved policy frameworks and reduced balance sheets and foreign currency exposure. Lastly, it will highlight potential longer-term challenges associated with the increasing fragmentation of capital flows (e.g., capital allocation and productivity) in a more digitalized and indebted environment and how they can pose macro-financial stability risks.