Out of the shadow!
We need transparency in the whole system, the touchstone of accountability.
The crisis revealed a dangerous "shadow banking system" causing the build up of excessive debt and speculative financial gambling. Both banks and these "shadow banks" created highly complex financial products to repackage and resell debts - at a profit - to enrich themselves and hide the real risks involved. They contaminated the entire financial system through their unaccountable and shady behavior, spawning a global financial casino, playing with our money, our jobs and our economies.
The interests of customers and workers have been sidelined.
The cartel of finance companies over financial markets and regulation must be dissolved. We must throw open the doors on this secret world through new regulation and supervision for transparency and accountability of financial institutions and products. We must enhance accountability, mandate and resources of supervisors.
In Pittsburgh in September 2009, G20 world leaders committed to strengthening financial supervision and regulation in Pittsburgh. Progressive insist that action must now follow without delay. Udo Bullmann, social-democrat member of the European parliament, said : "We believe that the EU should work towards a stronger financial supervisory architecture in order to prevent another market failure like the one we just witnessed"
Sharing the burden of the crisis!
Global financial markets have caused the most serious economic crisis since the Great Depression, over 80 years ago. In response to the current crisis, governments around the globe have been stabilizing and protecting their economies and jobs with taxpayers’ money. Many citizens ask themselves: Who is going to pay the bill for this? Are taxpayers the only ones to pay or will financial markets and investment bankers be held accountable to pay parts of the burden?
Financial supervision, Now!
If you see how Financial markets are globalized while financial supervision is fragmented, then it seems obvious we need to builid a proper European and International supervisory framework. Following the de Laorsière Report published early 2009, the European Commission published a first communication in Spring, which was endorsed by the June Council. In September, the financial supervision was published by the Commission, and sent to the European Council (of Ministers) and the European parliament, where the proposal is being discussed. Know more...
Transparency, Democracy, and Financial Regulation
In Brussels, the 229 industry experts of the European Commission even outnumber the approximate 150 Commission civil servants responsible for financial policy-making. According to a recent report published by ALTER EU, out of 1000 active Experts Groups of the European Commission, 19 have provided ongoing policy-advice on the financial sector. Out of these 19 expert groups,
o 8 were dominated by industry
o 7 were dominated by member states
o only 1 had equal NGO / industry membership
o and 3 could not be assessed as their full membership is not disclosed.
The danger we now have is the financial industry investing massive resources into capturing regulation for its private benefit to the detriment of the end-beneficiaries: the individual citizens and businesses in Europe and across the world who’ve suffered the consequences of this crisis.
Also worrying is the way hedge funds are buying their way out of regulation. You all recall the recent scandal on the ‘Alternative Investment’ sector’s donations to the Mayor Boris Johnson. On top of donations to the Conservatives’ central office or local branches, the Mayor of London Boris Johnson, a keen opponent to regulation on alternative investment, also benefited largely from the generosity of the sector: 77% of his 2008 campaign budget was funded by hedge funds and private equity firms and by their managers.
To know more about transparency and financial regulation, please click here.