Eurodollar Market (Hansard, 6 July 1971)

§ 13. Mr. Duffy
asked the Chancellor of the Exchequer if he will take the necessary steps to initiate talks with a view to the international regulation of the Eurodollar market.

§ Mr. Maurice Macmillan
The operations of the Eurodollar market are already kept under review by various international bodies and at regular meetings of the central bank governors.

§ Mr. Duffy
I am well aware of that. But does not the hon. Gentleman think that in view of the growing rôle of the Eurodollar market in magnifying and speeding up the movement of funds between financial centres at times of monetary uncertainty, it is now imperative that his right hon. Friend should take steps towards international regulation of the vast 60 billion dollar market before this country becomes vulnerable once more at times of international exchange crises?

§ Mr. Macmillan
I do not think that a great deal more can be done about this matter. The Bank for International Settlements is the main source of statistics on the market and a focal point for discussion, and the Ministerial meeting of O.E.C.D. has instructed O.E.C.D. to give special attention to the factors leading to undesirably large short-term capital flows. The governors of the central banks in the Group of Ten and the Bank for International Settlements have set up a working party to formulate policy on the Eurodollar market. In addition, some countries, including the United Kingdom, have taken measures to control resident borrowing. I do not think that it is necessary to go very much further than that.

§ Mr. Roy Jenkins
It certainly was not necessary to go on very much longer than that. Will the hon. Gentleman bear in mind that there is a serious problem here, and will he not sound quite so hopeless about it? I do not say that the solution is easy, but there is a special responsibility on the British Government, because the market is to a large extent run and controlled from London.

§ Mr. Macmillan
I entirely agree with the right hon. Gentleman on that. But I was asked whether we would take steps to initiate talks, and I was trying to show that many talks were already going on about the problem, which I agree is a difficult one.