Date: Fri, 29 Jan 1999 11:26:18 -0800
From: Ellen Gould <[EMAIL PROTECTED]>
Reply-To: [EMAIL PROTECTED]
To: Bob Olsen <[EMAIL PROTECTED]>
Subject: UN Proposes financial controls
Ottawa Citizen Jan. 29, 1999
WORLD NEWS
UN releases proposals for
reform of financial oversight
NICOLE WINFIELD
UNITED NATIONS (AP) - The United Nations has proposed a
host of initiatives to reform international financial oversight,
including a suggestion to let developing countries control money
flows in good and bad economic times.
In a report released Friday, a UN committee said more money must
be made available to countries before crises hit, and suggested the
creation of strong regional reserve funds that could also be used for
development.
The report by the UN Executive Committee on Economic and Social
Affairs was prepared in response to the Asian financial meltdown
that began in July 1997 and subsequent calls for a revamped system
of financial oversight to contain it and prevent another one.
The International Monetary Fund has stepped in repeatedly, promising
aid in exchange for economic reforms. But the UN report says the IMF’s
actions are often counterproductive or do not go far enough.
The IMF acts more as an organizer than a provider of funds and
attaches conditions for aid that are "not always appropriate to the
problems faced by countries in distress," the report says.
The IMF also has displayed very little ability to stop crises from
spreading to other countries, according to the report.
"World events since mid-1997 have made painfully clear that the
current international financial system is unable to safeguard the
world economy from financial crises," the report says.
Nevertheless, a reformed IMF is still seen as a main institution to
help prevent a financial crisis in one country jumping to another. The
IMF needs more money to help countries in need but also must be
revamped and subject to public scrutiny, the report said.
The report also suggests a new "world financial authority" that would
set international standards for financial regulation and supervision.
Among the more controversial suggestions in the report are its call
that developing countries be allowed to impose controls on capital
coming into the economy and out of it.
Taxes could be used to discourage massive investment during
economic surges, while investment banks and mutual funds could be
required to maintain minimum amounts of money in the country
during economic crises, the report suggests.
It also said the IMF shouldn’t impose conditions on needy countries
to force the governments to adopt a specific type of exchange-rate
mechanism.
The report also said debtors and creditors should be brought
together during bad economic times to reschedule debt.
.............................................
Bob Olsen, Toronto [EMAIL PROTECTED]
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