The Financial Market has suffered from the financial crisis which started to show its effects in the middle of 2007 in United States and took hold globally in 2008. Around the world, stock markets have fallen, large financial institutions have collapsed or have been bailed out, and inevitably economic growth has slowed downunemployment figures has begun to increase. The global financial crisis marks the end of unregulated market hegemony.
The financial and economic crisis of 2008 have risen a sensitive and urgent issue which the one of how to reform our current financial market in order to prevent any other major crisis as the one we are living now. A new financial architecture is needed to develop a system of international regulation that ensures that savings are prudently protected and that financial institutions including hedge and private equity funds operate in a way that benefits not only managers but also investors and workers. In other words, we need to make sure that financial markets contribute to the long-term investment needs of the real economy, especially through the provision of sufficient liquidity to the economy.
As Progressists, our global objectives are to tackle the problem of broader ‘financialisation’ of the global economy, limiting the financial instability caused by the manner in which hedge and private equity funds operate, subjecting the industry to the same rules of disclosure and transparency that apply to other players in the financial sector. We need to rethink the way financial markets have been thought by establishing that hedge funds should support, and not work against, the real economy.
Our global demands encompass:
- Transparency of private equity and hedge funds and the setting of minimum reporting standards and information disclosure
- Adequate measures to be taken by central banks to limit the threat to financial markets stability posed by hedge and private equity funds, including limits of leverage to lower the risk of default
- Effective taxation for funds managers, who are taxed on capital gains at much lower rates than income tax
- Ensure adequate corporate taxes paid by the companies taken over by the funds
- Trade unions and workers to be consulted and given information before a buyout
- Workers’ rights to collective bargaining, information and consultation are essential and ought to be guaranteed before a takeover
- An international task force to monitor developments on these markets and to study possible regulatory measures
Europeans for Financial Reform
A new pan-European campaign advocating comprehensive financial reform in Europe and globally was kick-started on September 21st by a wide coalition of NGOs, Trade Unions, politicians and ordinary citizens with the GPF being one of the founding members.
The Campaign “Europeans for Financial Reform” (EFFR) was launched with the aim of building a transatlantic alliance for financial reform with the already existing “Americans for Financial Reform”, an unprecedented coalition of over 80 national and state organizations joining forces to address the deficiencies of the US financial sector and to make the new system work for all. In the face of a full-blown global economic crisis, bold action is needed by EU Leaders to repair the broken financial system, establish integrity in the financial markets, and facilitate productive economic activity that benefits all segments of our communities. It is only by choosing such a path that the public’s shattered confidence in the fairness of the financial market place can be meaningfully addressed and a healthy, sustainable and productive economy can be established. The campaign has a brand new website and invites citizens and organisations to join the movement for financial reform. You can find out more at http://europeansforfinancialreform.org