Reform of IMF (was the global melodrama)

Doug Henwood dhenwood at panix.com
Thu Aug 20 10:10:14 PDT 1998


Brad De Long wrote:


>Treasuries and Central Banks fear that even talking about a Tobin tax is
>instant death for their international finance industries--that all
>transactions will move to Bermuda or the Caymans if they even start
>discussions...
>
>Yet another example of the race to the bottom produced by divided
>sovereignty and jurisdiction...

They say that, but is it really true? If the G-10 central banks wanted to enforce a Tobin tax, couldn't they? An IMF report on the 1992 ERM melodrama said that the Swiss national bank refuses to let its banks lend francs for shorting - that shows a pretty strong level of control for something putatively out of the authorities' hands. My guess is that the central banks don't want a Tobin tax, because they're totally in the grip of their financiers, not because it's beyond their technical capacity.

Doug



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