Thursday, August 28, 2008

Nikkei: EU, Japan, US Discussed Coordinated Intervention to Support Dollar

The US, Europe and Japan discussed the possibility of co-ordinated currency intervention to support the dollar during the Bear Stearns crisis in March, according to Japan's Nikkei online.

A G7 official told FT that he understood there were some preparations for possible currency intervention during the period of the Bear Stearns crisis

The G7 did not act during the crisis, nor did they issue an emergency G7 statement. However at their scheduled meeting on April 11, they expressed concern about "sharp fluctuations in major currencies" and "their possible implications for economic and financial stability". They added: "We continue to monitor exchange markets closely, and co-operate as appropriate."

The US/EU/Japan talks are very interesting, since the U.S. had abandoned trade stifling currency exchange intervention years ago. Proof positive that crisis brings out the worst in regulators.

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