Tsang enlists Brown in war on speculators
Friday 16 October 1998
Mr Tsang, whose unprecedented $13bn (pounds 7.6bn) intervention in the Hong Kong stock market in August raised the spectre of a wholesale retreat from the territory's robust pro-capitalist stance, said yesterday that the Chancellor had agreed "very substantially" with his calls for a three- pronged approach to the financial crisis
Mr Tsang, who met Mr Brown in London this week, is canvassing global support for the measures, which include:
The immediate deployment of funds to Brazil to arrest the contagion in Latin America;
The imposition of "discipline" on capital flows through greater disclosure and exchange of information between central bankers; and
A review of the architecture of the global financial system to avoid "gaps and overlaps" between the International Monetary Fund and the World Bank.
Mr Brown, he said, had agreed to pursue the matter with the Group of Seven leading industrialised nations while the Hong Kong authorities tried to marshal support in Asia.
"He agreed very substantially," Mr Tsang said, "there was more or less consensus on all our points, particularly on capital flows and the architecture."
The financial secretary said that in the wake of the crisis at Long-Term Capital Management, opinion internationally was moving in his direction.
However, Mr Tsang deliberately stopped short of calls for outright controls on capital flows, while defending the right of individual countries to defend themselves against massive speculative attacks.
By discipline he meant "greater monitoring, disclosure and transparency", he said, calling for consultation with hedge fund operators on how this could be achieved.
However, Mr Tsang pointed out that hedge funds, while based offshore, had to operate through one or more of the major financial centres.
Central banks should insist on more information and share that information between themselves. "We should ensure the capital flows are being put to good use rather than being used to fund speculative attacks on currencies," he said.
Mr Tsang rejected claims that Hong Kong's actions in August were inconsistent with the Hong Kong government's belief in the free market. He rejected charges that the intervention was inspired by the People's Republic of China, adding that no sovereign nation should be expected simply to yield in the face of speculative attacks.
"The one entity that cannot be blamed was the mainland," Mr Tsang said. "There was no memo, no telephone call, no e-mail. Nothing."
Hong Kong Monetary Authority officials say hedge funds bet more than $3.8bn against the Hong Kong dollar in August and would have made $4bn for every 1,000-point drop in the Hang Seng stock index.
- 1 What happens to your body when you give up sugar?
- 2 Japanese island overrun with cats after population explodes
- 3 Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
- 4 Have sex with your iPad thanks to the new sex toy no-one asked for
- 5 Average penis size revealed: Scientists attempt to find what is 'normal' to reassure concerned men
California teacher appears to have hanged herself in her classroom
The City of the Monkey God: Archaeologists claim to have found city lost for 1,000 years in remote Honduran jungle
Japanese island overrun with cats after population explodes
Delhi bus rapist blames dead victim for attack because 'girls are responsible for rape'
Bubonic plague-carrying fleas found on New York City rats
'Jihadi John': CAGE representative storms off Sky News accusing Kay Burley of Islamophobia
Durham Free School: 'Creationism taught at' free school facing closure
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
Ukip would cut billions from Scottish budget to fund English tax cuts
End of the licence fee: BBC to back radical overhaul of how it is funded
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
iJobs Money & Business
£36,000 - £40,000: Christine McCleave: Are you looking for a new opportunity a...
£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...
£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...
£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...