Brown promises IMF crackdown on hedge funds
Wednesday 29 September 1999
"In time it can become a world early-warning system for regional and global financial market risk," the UK Chancellor said. The new forum held its first meeting earlier this year.
Mr Brown added: "Claims of corruption and money laundering raise important issues for the credibility and effectiveness of IMF programmes."
He urged the IMF to review its safeguards and give more assistance to member countries on regulating offshore banking. The IMF has been criticised for the possibility that its massive loans to Russia could be misused, although an independent audit has not yet found evidence for this.
The new investigation will have a dual purpose; controlling a source of potential financial instability in the hot money flowing in and out of offshore centres, and tackling money laundering more effectively.
Speaking in his new IMF role as chairman of its steering committee, the Chancellor said there was no room for complacency even though the world economy and financial markets had stabilised and expectations of a recovery in 2000 had strengthened. He said important reforms agreed in the wake of the crisis in 1997 and last year must now be implemented.
These reforms include new codes of conduct for governments on fiscal and monetary policy and stricter requirements for transparency and economic surveillance.
The IMF now publishes its annual Article IV assessments of member economies which agree to it, and has started a pilot project publishing the full background reports for, initially, 46 countries. The number of countries agreeing to this scrutiny is expected to grow rapidly.
Speaking as the UK representative at the IMF meeting, Mr Brown said November's Pre-Budget Report would focus on the next stage of reforms to the jobs market, and to markets for goods and finance.
He repeated that UK growth could be at the upper end of his forecasts, but said this depended on sticking to the monetary and fiscal policy frameworks and responsible pay bargaining.
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