Media Releases

Media release: 11 April 1999

HEDGE FUNDS, GLOBALISM AND ECONOMIC MANAGEMENT

Hedge funds and their effect on Australia's trading environment are to come under public scrutiny.

A new inquiry into implications of globalisation of international financial markets for macroeconomic policy and the operation of financial markets was referred to the House Economics Committee today by the Treasurer, the Hon Peter Costello MP.

Committee Chairman, David Hawker MP, reported that 'In the reference, the Treasurer noted that while some of the implications of globalisation of the international economy and their effect on economic governance were taken up in the recent Prime Minister's Task Force on International Financial Reform, there are many other policy areas that need to be examined.'

'In particular the Treasurer has asked the Committee to look at the implications of the potential volatility of international markets for the design of macro-economic policies and options for improving the information available to markets.' A copy of the Committee's terms of reference is attached.

'The Australian dollar is one of the top five or six traded currencies in world financial markets. Australian financial institutions are playing a greater role in regional, global and international finance. Management of the Australian economy now raises new issues and it is timely for these to be looked at,' said Mr Hawker.

'The impact of hedge funds on the stability of the Australian dollar and the degree of disclosure by these funds will be part of our work. Likewise the impact on investment in Australia is a related issue.'

Mr Hawker noted that 'Australia has taken a lead role in looking at international financial reform and is contributing to developing stronger financial institutions and systems in the Asian region. The work of the Economics Committee will also contribute to this process.'

'It is also hoped that one of the outcomes of this inquiry will be a better understanding of these issues by the Australian community as a whole.'

'The Committee will be advertising this reference during the next couple of weeks' concluded Mr Hawker.

Ends
11 April 1999
Email: EFPA.Reps@aph.gov.au

Further information:
David Hawker MP (Chairman) 03 5572 1100 Electorate
Beverley Forbes (Secretary) 02 6277 4587

Terms of Reference

The globalisation of international financial markets has raised important issues for the conduct of macroeconomic policy and the operation of financial markets. This inquiry will examine these matters with particular reference to:

1. The implications of the globalisation of international financial markets for the conduct of fiscal and monetary policies in Australia, including medium-term and other strategies to cope with potential volatility in markets.

2. Information requirements for the stable and efficient operation of international financial markets, including the provision of information by governments and disclosure by market participants, especially by large market participants including highly leveraged institutions.

3. The relevance to these issues of recent developments in the international framework for financial regulation.

Committee Membership 39th Parliament

Chairman: Mr David Hawker MP
Deputy Chairman: Mr Gregory Wilton MP
Members:
Mr Anthony Albanese MP
Ms Anna Burke MP
Ms Teresa Gambaro MP
Mrs Kay Hull MP
Mr Mark Latham MP
Mr Christopher Pyne MP
Hon Alex Somlyay MP
Dr Andrew Southcott MP

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