Greenspan Warns About Currency Controls

Federal Reserve Board Chairman Alan Greenspan warned that imposition of currency controls by developing nations would be a serious policy mistake that could hamper trade and cripple investor confidence. Instead, he said, countries should do a better job of disclosing information about their economies. “The maintenance of financial stability . . . calls for greater attention by governments to the soundness of public policy,” he said in a speech in Washington. The Fed chairman’s remarks were his first public intervention in the debate over financial policies in some Asian countries suffering from volatile currencies and slumping stock markets. “It was a clear shot across the bow of countries like Malaysia and Thailand, among others, to clean up their act on monetary and fiscal policy,” said Willard Workman, vice president for international policy at the U.S. Chamber of Commerce. The Malaysian government recently threatened to block trading in its currency and blamed economic problems it is experiencing on currency speculators.