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Quashing speculation

The international financial markets are suffering another wobble. Ruth Kelly asks whether we should consider a "Tobin" tax on foreign currency speculation - or does George Soros have a better idea?

By Ruth Kelly   March 1998

The Tobin Tax: Coping with Financial Volatility Edited by Mahbub ul Haq, Inge Kaul and Isabelle Grunberg Oxford University Press 1996, £17.50

The faces of the world’s international financiers grow longer by the day. The rout on the exchanges in southeast Asia is thought to pose a serious risk to global economic growth in 1998. The speculators have claimed a succession of victims: the European exchange rate mechanism in 1992; the Mexican peso, which crashed by 70 per cent in the winter of 1994-95; now the once mighty Asian tigers. In the words of George Soros, “the international financial system…

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