This is from the Financial Times.. on capital flows run amuck!
"MONITORING: Global flows of capital 'need check'
By Michiyo Nakamoto in Tokyo
Japan's top financial diplomat yesterday proposed
stricter monitoring of international capital flows through a
global institution to prevent future currency crises like
that in Asia.
"International organisations should disclose their data
much more than in the past, and institutions like the
International Monetary Fund should monitor the flows of
capital," Eisuke Sakakibara, Japan's vice minister of
finance for international affairs, said yesterday.
Mr Sakakibara emphasised that his prescription was not
to control capital flows but to monitor them so that
people "could at least assess the risks," he said.
US officials including Robert Rubin, the treasury
secretary, and Alan Greenspan, chairman of the US
Federal Reserve, have added their voices to calls for a
review of the world financial system.
Mr Sakakibara said that an institution such as the IMF
would be best placed to perform such monitoring.
Although the Bank for International Settlements does
monitor capital flows to some extent, that was
insufficient, he said.
The need for such monitoring stems from the fact that
the Asian currency crisis is not an Asian problem arising
from flaws in the region's economic structure but a result
of the instability of global capitalism, Mr Sakakibara
said.
"This is a global crisis which could take place anywhere
in the world. There may be areas where Asian capitalism
needs reforms, but the basic nature of this crisis is of
capital flows," he said.
It was not appropriate to blame Japan for the crisis, as
some in the west had been doing, Mr Sakakibara said.
Not only had Japan provided the most aid to Thailand
and Indonesia, it was, together with Australia,
frontloading a $1bn second line of defence for trade
financing for Indonesia.
"Japan has been doing its utmost to help its Asian
neighbours both in terms of providing funds and
negotiating with the IMF. I want the Europeans to do
more and I want the Americans to do more if they are so
concerned about the Asian crisis," he said. The
Europeans, for example, could provide money to
Indonesia, while the Americans could activate the
second line of defence, he said.
Japan played an important role in helping to bring about
the revised agreement between Indonesia and the IMF,
he pointed out. "The worst of the Asian crisis is over," he
said. "Four to five years from now people will be talking
again about the Asian miracle." |
