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Age of uncertainty

Financial crises like that in Asia will become more common unless global financial regulation is improved. Even former advocates of a fully liberalised global capital market now accept that the issue is how to give international institutions such as the IMF more power to intervene

By Edward Luce   July 1998

Harold Wilson once blamed the “gnomes of Zurich” for the sterling crises which dogged Britain in the 1960s. Mahathir Muhammad, Malaysia’s prime minister, was expressing similar sentiments when he blamed his country’s currency crisis on George Soros and other “Zionist” speculators. In both cases the statesmen were rightly mocked for brazenly trying to pass the buck. (Soros actually lost money in the Malaysian currency turmoil although, unlike one or two other hedge funds with heavy exposure to Asia, he did not lose his shirt).

Holding up politicians to ridicule is one thing-but absolving the financial markets of any responsibility for…

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