Central Bank Governor Calls for Supervision over Short-term CapitalChina's central bank governor Dai Xianglong Thursday urged the international community to carefully monitor the flow of short-term capital.The international community "should establish necessary rules and standards as soon as possible to restrain the irregular flow of capital, and strengthen supervision over highly-leveraged institutions and off-shore centers," Dai said. Addressing the ongoing 21st Century Forum -- Conference 2000, the governor put forward several suggestions to reform the international monetary system. "The violent movements of exchange values among the major currencies bring along huge risks for BOPs and the stability of currencies in developing countries," Dai said. Major developed countries should assume a responsible attitude toward coordinating their macroeconomic policies to minimize exchange fluctuations of major currencies. Dai maintained that that regional integration is the foundation for economic globalization. "We hope that the U.S. dollar would stay stable. We welcome the launch of the Euro and support the agreement signed by ASEAN (the Association of Southeast Asian Nations) members, China, Japan and the Republic of Korea to initiate currency swaps," Dai said. The governor emphasized that the monopoly by a handful of developed countries in making rules must changed. The international community should establish a new system of coordination and ensure that the interests of developing countries not be sacrificed, Dai said. "We welcome informal dialogues such as G-20," Dai said, adding that China will continue to support and take part in G-20- initiated activities, support IMF (International Monetary Fund) reforms and contribute to the establishment of a new international monetary and financial system. On the role of the IMF, Dai suggested that the world organization focus on two issues. First, IMF should have an early warning mechanism to effectively prevent financial crisis. Second, it should provide liquidity assistance in times of crisis. The three-day conference attracted over 500 participants, including statesmen and leaders from nearly 20 countries. |
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