IMF to discuss KL's proposal to rule hedge fund activities<\/p>\n
KUALA LUMPUR (AFP): The International Monetary Fund (IMF) will
\ndiscuss Malaysia's proposal to regulate hedge fund activities in
\nWashington this week, Deputy Prime Minister Anwar Ibrahim said
\nyesterday.<\/p>\n
Anwar, who is also finance minister, said the IMF has
\n\"accepted in principal\" Malaysia's proposal, aimed at protecting
\ndeveloping nations from excessive manipulation and financial
\nabuses in the global market.<\/p>\n
\"The IMF contacted me last Saturday and informed me that they
\nwill start the study of the Malaysian proposal this week,\" Anwar
\ntold reporters on the sidelines of a stock market seminar.<\/p>\n
The proposal was made by Anwar and Prime Minister Mahathir
\nMohamad during the IMF and World Bank meetings in Hong Kong last
\nmonth, after speculative attacks on Southeast Asia's currencies.<\/p>\n
\"We are glad that the IMF has included Malaysia's proposal on
\nthe possibility of introducing prudential regulations on hedge
\nfund activities in its study on the new arrangement for
\nborrowers,\" he said.<\/p>\n
Although the Washington-based IMF has guidelines for
\nprudential regulations and supervisions of banks, it has none on
\nhedge funds and investment houses.<\/p>\n
Hedge funds are international funds subscribed to by wealthy
\nindividuals who aim for above-average returns by betting heavily
\non global currencies, a move which could destabilize currency
\nmarkets.<\/p>\n
\"We should look upon the recent events as a learning
\nexperience,\" Anwar said. \"It is now clear that all facets of our
\ncapital markets -- equity, bond and futures -- need to be
\nstrengthened.\"<\/p>\n
Malaysia has blamed foreign funds and singled out U.S.
\nbillionaire financier George Soros for manipulating the ringgit
\nand share prices on the Malaysian bourse, both which had eroded
\nmore than 30 percent in value since July.<\/p>\n
Other regional currencies, such as the Thai baht, the
\nPhilippines peso and the Indonesian rupiah have also been hit
\nhard.<\/p>\n
Mahathir has urged the international community to outlaw
\ncurrency manipulation and has twice called for a ban on currency
\ntrading, which immediately sent the ringgit plunging to record
\nlows.<\/p>",
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