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Turner hints at crackdown on carry trade

FSA chairman Adair Turner has hinted at a crackdown on carry trade, labelling a big part of the City’s foreign exchange trading business “economically valueless”.

According to the Times, Turner was speaking after a private session on casino banking and regulation.

He said banks and hedge funds that borrowed cheaply in US dollars to bet on higher yielding investments in emerging markets were adding no value to the real economy.

Of the carry trade, Turner said: “It is a form of speculative activity where you can’t work out what the value is to the real economy. You are betting you are going to get out before the train wreck – the adjustment –  happens.

“If I could wave a magic wand here and greatly reduce the carry trade, I’m pretty certain the world would be a better place.”

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Comments

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  1. Incompetent Regulators Awards Team 1st February 2010 at 2:54 pm

    Economically valueless………………..reminds me of another organisation…..mmmmmmmm I wonder which one it is Mr Turner?

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