Bush revives currency plan

PRESIDENT George Bush has relaunched an American proposal aimed at helping to calm currency volatility and improving co-ordination of economic policies among the leading industrial countries.

Concern over last week's currency turmoil prompted Mr Bush to relaunch a US plan in which movements in leading currencies would be measured against movements in prices of a basket of commodities, including gold. Mr Bush, who made the presentation to finance ministers of industrial and developing countries attending the International Monetary Fund annual meetings, said the basket could be used alongside other measures of economic performance, such as growth, inflation and trade imbalances, to strengthen economic policy coordination.

If the basket measure suggests that exchange rates have become misaligned, there could be changes in economic or monetary policies, perhaps backed up by intervention on the currency markets. In principle it would provide an 'objective' measure of exchange rate changes for meetings of the Group of Seven leading industrial states.

The US plan was first unveiled in 1987 when James Baker as Treasury Secretary tried unsuccessfully to establish a semi-fixed exchange rate system for leading currencies. The relaunch this week, to be repeated at the United Nations General Assembly, reflects Mr Baker's new role as White House Chief of Staff.

Some support for for Mr Bush's proposals began to emerge yesterday.

Michel Sapin, the French Finance Minister, and Michel Camdessus, managing director of the International Monetary Fund, both urged a new debate of the global monetary system. Henning Christophersen, Vice-President of the European Community Commission, said the Atlantic dialogue on currency reform should be reinvigorated.

The IMF was accordingly said to be considering bringing forward to early 1993 the date for its semi-annual meetings.

Though the US plan may fail to attract widespread international backing as was the case five years ago, worries about eroding co-operation among the Group of Seven may breathe life into the broader debate over reforms to the world monetary system.

Underlining concern over instability in financial markets, the IMF last week suggested that market liberalisation had not been matched by regulation and the policing of markets by governments.

Separately, Britain urged that debt relief terms for the world's poorest countries should be improved.

In a speech to the World Bank/IMF Development Committee, Robin Leigh-Pemberton said that the current relief offered by industrial countries - including a write-off of two-thirds of a country's debt - was insufficient, especially for those trying to reform their economies.

The Governor of the Bank of England, standing in for Norman Lamont who has returned to London, said: 'Relief needs to be more generous.'

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
musicOfficial chart could be moved to accommodate Friday international release day
Sport
Wes Brown is sent-off
football
News
i100
Sport
Italy celebrate scoring their second try
six nations
Sport
Glenn Murray celebrates scoring against West Ham
footballWest Ham 1 Crystal Palace 3
Arts and Entertainment
Drake continues to tease ahead of the release of his new album
music
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

The Last Word: For the good of the game: why on earth don’t we leave Fifa?

Michael Calvin's Last Word

For the good of the game: why on earth don’t we leave Fifa?
HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower