One major point of contention: Controls on the movement of capital. "There's growing agreement on the need for some form of restriction on the movement of short-term 'hot money,' because its volatile movement in and out of developing countries creates massive instability," says Baumohl. That news, and the IMF's impasse, won't generate much enthusiasm on stock markets. But Baumohl reports that "there's talk, once again, that the G-7 countries and most of the European Union plan to announce a coordinated cut in interest rates by the end of the year." And that would be the stock market equivalent of a shot of Viagra.
G-7 Weighs an Early Christmas
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WASHINGTON: Wall Street won't get much good news from the IMF this week,
but the G-7 countries may be planning to console nervous investors -- with a
coordinated interest-rate cut. President Clinton urged IMF members Tuesday
to take decisive action to stop international economic collapse, but the
international body isn't exactly poised to take up the challenge. "This
week's IMF discussions are unlikely to produce any significant agreement
because the issues are simply too complex to resolve quickly," says TIME
business reporter Bernard Baumohl.