The Hot Money Trap

Secondly, speculative capital is extremely difficult to identify.

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It also invites destabilizing hot money capital inflows.

At least part of the difference can be attributed to hot money.

The proposed liberalization will, after all, increase the risk of speculative capital movements.

The impact of the Fed s policy and hot money has been dramatic.

Pushing countries to liberalize their capital markets and open them up to speculative capital flows is one example.

An amendment referring to taxation on speculative capital transfers also suffered the same fate.

I should like to come back to one specific matter, namely that concerning the taxation of speculative capital flows.

Particularly ironic was the provision designed to restrict Chile's use of capital controls for short term speculative capital flows.

But now Strauss Kahn is throwing cold water on proposals to tax international flows of hot money.

How can we control the continuous growth in the financial sector and in speculative capital which is destabilizing exchange rates?

There is only one reference to the tax on flows of speculative capital the so called Tobin tax.

Second, many argue that raising interest rates would trigger a flood of speculative capital from low yielding advanced economies.

Even the profits from these overseas investments, which are based on the exploitation of labour in Third World countries, will begin to dwindle according as the workers in these countries begin to assert them selves.

But now I call on you, in all consciousness, to help put a stop to speculative financial transactions and undermining long term projects with long term capital.

But the long run can be long indeed, and the influence of speculative capital flows can be substantial and sustained.

And while only 37 of inflows in 2006 were hot money that can leave at a moment s notice, last year such inflows accounted for 69 of the total.

Concerned about the excessive volatility of speculative short term capital flows and the contagion effects in financial markets in times of crisis,

Finally, tightened financial market regulation could perhaps slow some of the hot money flows that exaggerate the booms and busts.

Fiscal harmonization should not only tackle tax evasion and speculative capital movements, but also encourage investment that will create lasting jobs.

Openings and real growth are being hampered and the sudden influx or withdrawal of speculative capital is threatening the economies of many countries, to the point of collapse, as in Asia, Russia and Brazil.

Analysing speculative investments.

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Since 2009, it has accepted and even recommended that such regulations are useful to manage the massive inflows of hot money into emerging markets.

The establishment at Community level of taxation on speculative capital movements and reinforcement of the fight against fraud and tax evasion.

The fourth option is to impose capital controls on inflows (or liberalize controls on outflows). Leaving aside the issue of whether or not such controls are leaky, evidence suggests that controls on inflows of short term hot money do not affect the overall amount of capital inflows.

I attend lots of meetings on the ECU. I can assure you that the intellectual stance of those who are against the ECU is very weak.

It will probably therefore continue to be necessary for Denmark to avail itself of the protection clause to ensure that we can prevent purely speculative capital movements out of and into the country.

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Hedge Funds The Sting is in the Tail

Hedge funds could throw a scare.

Hedge funds are bailing on Apple.

they were full of speculation, they were anecdotal

Seen in retrospect, this is not enough for the Court of Justice.

In addition, in very recent times, the poor masses in a number of countries in South Eastern Asia have had to pay a high price for their 'partnership' with the speculative capital interests which have swarmed all over their region.

A gold standard rule would have produced higher rates for the southern European borrowers, which would have attracted funds to where capital might be productively used, and at the same time acted as a deterrent against purely speculative capital flows.

Secondly we believe that it is of paramount importance in any further liberalization of capital movements to ensure that we do not create new regional and social problems in those regions of tne Community which already suffer from a drain of capital. We should therefore formulate a policy which make financial resources available to those regions.

Despite the crisis there has not as yet been excessive tension within the EMS.

Large EU banks exposures to hedge funds

Is there not a danger that your proposed strategy will exacerbate the speculative movements?

For benefits which at best are vague and speculative.

As late as November of last year, IMF Managing Director Dominique Strauss Kahn had thrown cold water on Brazil s efforts to stem inflows of speculative hot money, and said that he would not recommend such controls as a standard prescription.