Towards a Global Finance System at the Service of Sustainable Development

8/2/2019 Towards a Global Finance System at the Service of Sustainable Development

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Assessing the development impact ofEuropean and global financial reforms

Towards a Global Finance Systemat the Service

of Sustainable Development

Towards a Global Finance System at the Service of Sustainable Development


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Publisher:Weltwirtschaft, kologie& Entwicklung - WEED e.V.

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Publishing consortium:Association Internationale deTechniciens, Experts et Chercheurs(AITEC)

Centre for Research on MultinationalCorporations (SOMO)

Glopolis

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VdegyletWorld Economy, Ecology &Development (WEED)

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Commission and of the Ford Foundation forthe production of this publication. The viewsexpressed herein are those of WEED and itspartners and cannot, therefore, be taken toreflect the official opinion of the EuropeanCommission or the Ford Foundation.

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Towards a Global Finance System at the Service

of Sustainable Development

Assessing the development impact of European and global financial reforms


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Contents

Summary ........................................................................................... 5

1. Introduction ...................................................................................... 6

2. The nancial crisis and developing countries .................................... 7

2.1 Capital ows ................................................................................ 7

2.2. Financialisation o commodity markets ....................................... 8

2.3. Real-economy channels: trade and remittances ........................... 9

2.4. The social and economic eects o the crisis ............................... 9

3. EU nancial reorms .........................................................................11

3.1. Reorming the banking sector .....................................................11

3.2. Credit rating agencies (CRAs) ....................................................13

3.3. EU regulation o investment unds ............................................14

3.4. Derivative trading, and ood and commodity speculation .......... 15

3.5. The new supervisory architecture ...............................................17

3.6. Trade and investment agreements ............................................ 19

3.7. Tax havens ................................................................................ 203.8. The Financial Transaction Tax (FTT) .......................................... 21

3.9. Currencies ................................................................................. 22

3.10. Capital controls ....................................................................... 23

3.11. Trade imbalances ..................................................................... 25

4. Conclusion: Towards a global nance system at the serviceo sustainable development ............................................................ 26

General resources and urther inormation ..................................... 27


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4


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5

SummaryTe global debate over nancial reorm is still ongoing. In the Europe-an Union (EU), some reorms have now been implemented, but theserequently are only hal-measures and, thus, do not oer adequate pro-tection against uture turbulence. However, EU nancial reorms mustacilitate progress towards global sustainable economic development.Furthermore, reorms will not only aect the EU; they will also stron-gly impact on developing countries. Consequently, the EU should pri-oritise the ollowing goals:

Considering sustainability and the precautionary principle in all re-orms.

Ensuring ull transparency o EU nancial operators and markets.

Comprehensively regulating all nancial actors to prevent shadowbanking.

Deleveraging the nancial system, especially the banks.

Introducing restrictions on speculators and speculative products, es-pecially in commodities markets.

Supervising European banks operating in developing countries.

Permitting prudential capital controls in ree trade and investmentagreements.

ackling tax evasion and tax avoidance, and increasing progressivetaxation o wealth.

Facilitating innovative development nancing via a Financial rans-actions ax.

Pushing or greater international cooperation on exchange rates, tra-

de imbalances and capital ows.

Giving developing countries a greater say in international decision-making processes and in supervision.


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6 1. Introduction

Te nancial crisis is truly global inscale. It will have a lasting impact ongrowth, jobs and debts, and will be along-term burden or economies all overthe world. Although it originated in thedeveloped world, the subsequent allouthas been keenly elt in developing coun-tries. For example, reduced lending, o-reign direct investment and aid, along

with weaker export revenues, have re-sulted in increased poverty, unemploy-ment and indebtedness.Te crisis is a consequence o the glo-bal rise o neoliberalism. An unwave-ring belie that markets are efcient andbanks are sel-regulating, resulted in ex-cessive privatisation, liberalisation andderegulation. Financial markets are nowpredominant, and traditional economicactivities, such as classic production andservices, are slowly being sidelined. Tissystem engenders inequality, uncertain-ty and the concentration o power in the

hands o the ew. Short-term speculati-on and excessive risk-taking are rewar-ded, despite their destabilising eects onthe wider economy. Furthermore, thecurrent crisis is not an isolated event, asdemonstrated by the 1997 Asian Finan-cial Crisis. However, markets can aci-litate development, provided sensible li-mits are imposed. It is simply unbridledcapitalism that one must guard against.Many countries are now taking steps torestructure the system and restore sta-

bility. However, the debate over which

reorm measures are most appropriateis still ongoing. In the European Uni-on (EU), some reorms have now beenimplemented, but these requently areonly hal-measures and, thus, do not o-er adequate protection against utureturbulence. Additionally, many impor-tant reorms have been completely omit-ted, or are only just at the concept pha-se. For example, the European Union isnot scheduled to reach a conclusion onareas such as derivatives regulation un-til 2011, despite this having been a keyissue or many years. Tus, whilst manyexisting EU reorms are promising, the-re is still much work to be done. Teoverall goal must be a global nancesystem that serves sustainable develop-ment, both in developing and developedcountries.Tis brochure, which is part o the EU-unded project owards a Global Fi-nance system at the Service o Sustai-

nable Development, rst looks at theimpact o the crisis on developing coun-tries. It then gives an overview o se-veral legislative proposals launched bythe European Union since the nanci-al crisis began. Where negative eectsare identied, possible solutions are out-lined and discussed. Without substanti-al, widespread nancial reorm, history

will repeat itsel. We have a responsibi-lity to ensure the nancial system aids,rather than hinders, sustainable deve-

lopment.


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72. The nancial crisis anddeveloping countries

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Developing countries have requentlybeen aected by nancial crises over thelast ew decades. Such crises can direct-ly aect an entire generation. At the be-ginning o the current crisis, some eco-nomists postulated that emerging eco-nomies might emerge unscathed, as spe-

culative nancial capitalism was ar lessprevalent and growth gures were initi-ally robust. However, this decouplingdid not materialise, and, when lendingand trade declined, developing nationssoon joined the global downturn.

2.1 Capital fows

Private capital ows to both developedand developing economies, but particu-larly to the latter, greatly increased in theyears preceding the nancial crisis. Ho-

wever, 2008 saw a reversal o this trend,and the rst all in such investment sin-ce 1997. Te largest component o thisoutow consisted o portolio invest-ment. Portolio investment involves thepurchase o assets (such as shares, bondsand derivatives), without any intentiono taking-on a long-term management

role. Tis is distinct rom oreign directinvestment (FDI), in which the investoractively partakes in governance over timeand, thus, oten introduces new techno-logy or expertise. However, there are alsosome unavourable accompanying condi-tions, such as tax exemptions.Portolio investors generally hold assetsor only a short period o time. Moreo-

ver, they oten exhibit herding behavi-our; i.e. trading decisions are oten deter-mined by how others are trading, ratherthan by market undamentals. Frequent-ly asset bubbles are created and then sub-sequently burst, as there is a collectiverush to buy, ollowed by a collective rushto sell, that are both driven more by emo-tion than by rigorous nancial analysis.Tus, portolio investment can be high-ly volatile, and oten does not acilitatestable economic growth. Consequently,

its role in development should be questi-oned, and capital controls considered.FDI has also dramatically increased in de-veloping countries in recent decades. Ho-

wever, the current crisis has severely a-ected FDI capital ows to emerging mar-kets (see gure 1), and, thus, European -nancial reorm initiatives must support,not impair, recovery o sustainable FDI.

Figure 1: Foreign direct investment to emerging and developing economies

*Projection, source: IMF


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8 Tankully, the eect o the nancialcrisis on ofcial development assistance(ODA) has hitherto been more res-trained than one might have expected.However, whilst many donor countries

have avoided cuts, a signicant overalldecrease has still been registered. Fur-

Source: Food and Agricultural Organisation

thermore, as many developed countriesare orced to implement widespread pu-blic spending cuts to combat large bud-get decits, many may advocate down-sizing ODA investment to mitigate do-

mestic pain.

An additional result o neoliberalismwas the ood price spike o 2006 2008. Tis is a severe example o howmodern nancial markets can threatenthe lives o millions o people in deve-loping countries. Food prices rose dra-matically around the world at the end o2007 (see gure 2). According to UNO,between 109 million and 126 million peo-ple may have allen below the $1 per daypoverty line owing to this increase. Initi-ally, all sorts o actors were put orwardto explain the rise; or instance, incre-asing demand in emerging economiesor the production o biouels. But then

Figure 2: FAO Food Price Index

rom July 2008 onwards, prices collapsedagain and it turned out that these long-term actors were not ully responsible orthe spike. Other orces were at work here,specically the rise o extensive speculationvia commodities utures by big banks andso-called index unds, especially in the ye-ars preceding the crisis. For example, tradein agricultural utures and other derivativesincreased by 32% in 2007. Whilst there isan ongoing debate in the nancial sectorover the extent that speculation impactson prices, a recent World Bank workingpaper acknowledged the relationship.

2.2. Financialisation o commodity markets

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9Te rapid rise in global trade in recenttimes has played a key role in develop-ment and poverty reduction.However,

in 2009 global trade dropped nearly 13percent. Tis is the largest decline sincethe 1930s, and is sorely elt throughoutthe developing world. Global imbalan-ces, and any subsequent protectionistmeasures, pose an additional threat tothe recovery o exports.In a similar vein, remittances, i.e. trans-ers rom labour migrants to their home

countries, dramatically increased in theyears immediately preceding the crisis:rom $83 billion in 2000 to $338 billi-

on in 2008. Tis revenue represented asubstantial proportion o gross domesticproduct in many developing countries.However, pressure on wages and an in-crease in unemployment in the develo-ped world have severely depressed thesecash ows. A report by the World Banknotes that remittances ell by approxi-mately 6 percent in 2009.

Social developments achieved over thelast ten years have been interrupted andrequently even reversed due to the cri-sis. Consequently, the Millennium De-velopment Goals (MDGs) are now unat-tainable. According to the World Bankand the United Nations, 55-114 milli-on additional people have become poor

(surviving on less than 1.25 US dollarsa day) as a result o the crisis; similar e-ects have been registered or people ear-ning less than 2 dollars a day (see gure3). Moreover, even these alarming sta-tistics cannot ully convey the sueringand injustice experienced by the worldspoor.

2.3. Real-economy channels: trade and remittances

2.4. The social and economic eects o the crisis

Te crisis also risks derailing the

progress achieved in reducing the debtburden o developing nations. Declin-ing tax revenues, the need or increasedsocial security payments (where they ex-

ist), and nancial sector support or stim-

ulus packages orced increased borrow-ing between 2008 and 2009 (see Figure4), despite the already large budget de-cits in many developing countries.


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10

0

5

10

15

20

25

30

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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010* 2011*

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Figure 3: Number o people whose income is below 2 US dollars per day

Figure 4: External debts o emerging and developing countries


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2000 2001 2002 2003 2004 2005 2006 2007 2008* 2009*

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*Estimates, source: ILO

Further reading:

International Monetary Fund (2010): World Economic Outlook April 2010. Rebalancing

Growth. Washington.

http://www.im.org/external/pubs/t/weo/2010/01/pd/text.pd

Wahl, Peter / Christoph Ernst (2010): Simply collateral damage? The fnancial crisis anddeveloping countries. WEED, Berlin.

http://www2.weed-online.org/uploads/the_fnancial_crisis_and_the_developing_countries.pd


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11

Te need or deep nancial reorm is una-nimously accepted by all countries and po-liticians. However, strong lobbying romthe nancial sector has succeeded in che-cking progress. As a consequence, manyproposals are hal-measures at best. Whi-le the US has had a airly ambitious re-orm act in orce since July 2010, the EUhas been more timid. Progress had beengradual, and many important regulato-ry changes, such as tightening controls onderivatives trading, are only just being dis-cussed.

As one might expect, the ocus o the re-orms is the EU itsel, rather than the im-pact o these reorms on developing coun-

3. EU nancial reorms

tries. However, this approach is insufci-ent, given the interconnectedness o theglobal economy, the impact o the EU orglobal nancial stability, and the variousactivities o EU companies, EU banks andEU unds in developing countries, as wellas the importance o EU rules and EU-in-uenced rules in global standard setting.In this section, the most important reormproposals and discussions will be analy-sed with respect to their impact on nan-cial stability and sustainable development,i.e. their ability to help deliver higher stan-dards o living in the developing world,along with more environmentally sustai-nable development globally.

Banks are still the main provider o ca-pital and nancial services. Tey havebeen at the heart o the crisis, and theirreorm is the most important issue o all.

A sustainable model is needed to ensu-re that banking works or the real eco-nomy.

Well-reasoned capital adequacy rulesare a key component to stable ban-king. Tese limit the credit lines banks

can extend, and also orce banks to set-aside capital so that any losses rom de-aulting counterparties can be absorbed.Rules can apply to single activities, e.g.loans, or across all the activities a bankengages in, e.g. total loans extended incompassion to a banks own capital base.Te rules can be rather one-size-ts-all,or they can take into account dierentbusiness models and transactions, e.g.traditional loans versus involvement

with derivatives or securitized papers. As

setting aside capital ties up unds thatcould be lent out or invested, banks ge-nerally lobby hard against any moves to

increase requirements. In the recent ageo light-touch regulation, banks success-ully pressured governments into limi-ting capital adequacy rules this wasone o the primary causes o the currentnancial crisis.Te international capital requirementsstandards are set by the Basel Commit-tee on Banking Supervision, an interna-tional body o supervisors. Te current

regulatory ramework is called BaselII. It has been transormed by the EUinto the Capital Requirements Directive(CRD) o 2008. Since the 2008 nanci-al crisis has highlighted deep insufcien-cies in CR rules and the Basel rules havebeen revised, the EU is now in the pro-cess o reviewing the CRD. One reviewrom 2009 includes limiting securitiza-tion (loans and other previously illiquidassets packaged in new nancial pro-ducts and sold), mitigating risks rom

inter-bank lending, and supervision oall cross-border banks headquartered inthe EU. Another revision agreed in July

Further reading:

Wahl, Peter (2010): Fighting Fire with Buckets. A Guide to EU Regulation o Finance.

http://www.weed-online.org/publikationen/publikationen/4148887.html

3.1. Reorming the banking sector


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12 2010 covered increased capital requi-rements or re-securitizations, tradingacross all asset classes, better transparen-cy, improved risk assessment procedures,and strict rules on how to regulate and

pay sta.Te EU process runs parallel to the cur-rent comprehensive reorm o Basel II,

which will result in the so-called Basel-III rules. Te latter will include new

Bank Number o subs/branches in developing countries

HSBC (UK) 38

BNP Paribas (F) 35Credit Agricole (F) 33

Barclays (UK) 25

Deutsche Bank (Germ) 20

Unicredit (It) 18

ING (NL) 17

RBS (UK) 17

Santander (SP) 9

ABN Amro (NL) 7

Table 1:Number o subsidiaries/branches o EU-based banks in developing countries

Source: SOMO, based on the banks annual reports and websites, March 2010

standards on the quality and amount ocapital and liquidity reserves, the build-up o counter-cyclical capital buers,the level o indebtedness (leverage ratio),and systemically important institutions.

Te EU will implement these proposalsater they have been agreed internatio-nally.Te question now is whether the upco-ming higher capital requirements will

aect the availability o credit and nan-cial services to (poorer) clients in develo-ping countries in which EU-based banksoperate (see table 1). Many banks haveexpressed this concern. Similarly, dome-stic banks in developing countries maystruggle to stay aoat once they are re-quired to set more capital aside.Proper risk assessment, which was insu-cient beore the crisis, is now crucial toprevent reckless and unsustainable ban-king. Te CRD and Basel II rules pre-

scribe how a banks risks should be as-sessed. Tis is not only important orthe banks general perormance, but alsobecause capital requirements are relatedto this assessment. Basel II allows banksto conduct their own risk-assessment -a so-called internal ratings-based ap-proach. Not surprisingly, banks prescri-bed themselves minimal levels o buercapital, so that maximum capital wasavailable or lending and investment. Incontrast, banks rom developing coun-

tries relied on external ratings, which re-

sulted, on average, in higher capital re-quirements. Consequently, Europeanbanks had a competitive advantage, asthey could provide cheaper credit. Tus,risk assessment procedures need to be re-assessed and standardised. In addition,reorms should mandate that banks in-corporate sustainability criteria into cre-dit risk assessment.Financial exclusion is another key issuethat must be addressed. Te current -nancial system requently discriminates

against poor and disadvantaged peo-ple, both in developing countries and

within the European Union. For exam-ple, many low-income European citizensare denied access to a current account,because commercial banks prot romsavings accounts and mortgage lending,

which the impoverished are unlikely toever need. Consequently, it is imperativethat European reorm proposals promo-te universal access to basic nancial ser-vices.


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13Further reading:

Gormley, Todd A. (2007): Banking Competition in Developing Countries: Does Foreign Bank

Entry Improve Credit Access?

http://fc.wharton.upenn.edu/fc/india/11gormley.pd

BankTrack (2010): Submission to the Basel Committee on Strengthening the resilience o

the banking sector / International ramework or liquidity risk measurement, standards

and monitoring. http://www.banktrack.org/download/submission_to_the_basel_commit-

tee/100415_submission_to_the_basel_committee.pd

BankTrack (2010): Close the Gap. Benchmarking credit policies o international banks.

http://www.banktrack.org/download/close_the_gap/close_the_gap.pd

Such rapid changes imply that not en-ough consideration was put into the in-itial ratings, which clearly were inaccu-rate. Tis rapid downgrading occurredrecently with Greeces rating, which hada major impact on Greeces capacity tonance its debt by issuing bonds.Te EU didnt regulate CRAs prior to thecrisis, and regulatory reorm is still cur-rently ongoing. Since September 2010,

CRAs have had to register, assess the riskso conicts o interest, and meet transpar-ency and due diligence requirements. An

additional reorm is on its way, whichmainly deals with supervision at the Eu-ropean level, and rules or a CRA on dis-closing its ratings to other CRAs, thusensuring more transparency.Rating agencies have an enormous im-pact on development, because their rat-ings determine the cost o unding orboth governments and companies inthe developing world. Frequently small

companies cannot aord the high ratingees and, thus, do not get rated. Conse-quently, these companies are not able to

PIGS stands or Portugal, Italy, Greece and Spain

3.2. Credit rating agencies (CRAs)

Credit rating agencies (CRAs) are in-stitutions set up to measure the cre-ditworthiness o banks, investors andstates, and the risk-o-deault on the -nancial products they issue. Te marketor CRAs is highly concentrated: two bigCRAs (Moodys and Standard&Poors)and a smaller CRA (Fitch) control about90% o the global market. Teir poweris strengthened by the act that their ra-tings are also obligatory or regulatoryrameworks such as Basel II (see above,

3.1), and banks oten depend on theseratings.ime and again, such as during the Asi-an and the current crisis, CRAs haveailed to adequately assess the credit-

worthiness o products and institu-tions. Tey were also heavily criticizedby governments due to their ratings ostates. Frequently countries were givenhealthy ratings, which were then switlydowngraded during the nancial crisis.


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14 interests within rating agencies are notbeing dealt with sufciently in the cur-rent EU proposals, and no viable alterna-tive or assessing deault risks is envisagedso ar. Another problem not yet addressed,

is how CRAs can adequately incorporateinto their ratings the social and environ-mental risks that the borrowers and nan-cial products they rate pose.

Further reading:

Elkhoury, Marwan (2008): Credit Rating Agencies and Their Impact on Developing Coun-

tries. UNCTAD discussion paper.

http://www.unctad.org/en/docs/osgdp20081_en.pd

Elkhoury, Marwan (2010): Credit Rating Agencies and Their Impact on Developing Coun-

tries. Credit Rating Agencies and Their Impact on Sovereign Debt in Developing Countries.

Saarbrcken.

secure reasonable terms to access capitalby credits, or by issuing bonds or stock.

A major problem is the small number owell-established rating agencies, whichresults in severely substandard level o

competition. Te EC has expressed itsconcern about this, but has not yet pro-posed a solution to eliminate this prob-lem. Also, concerns about conicts o

3.3. EU regulation o investment unds

Funds play an important role in modernnancial markets, channelling a consi-derable share o global capital. So-calledalternative investment unds (AIFs)cover hedge unds, private equity unds,commodity unds, real estate unds, in-rastructure unds and other types o in-

stitutional unds. Tese unds managedaround EUR 5 trillion in assets at theend o 2008.Hedge unds are the agship o un-bridled capitalism. Tese unds havethus ar been ree rom supervision andmost investment restrictions. Tey ge-nerate enormous prots or wealthy in-dividuals and institutional investors. ogive an example o their impact, onehedge und purchased 7 percent o theglobal cocoa harvest in July 2010 in or-

der to drive up prices. Tese unds alsoplayed a pivotal role in the current -nancial crisis, e.g. in the collapse oBear Stearns. Furthermore, long beorethe current crash, the 1998 collapse oLCM had already demonstrated thathedge unds had the ability to under-mine the stability o the entire nan-cial system. Tese unds also invest indeveloping countries, and they are parto the tax haven business (see 3.7) thatchannels a vast amount o money out o

developing countries every year.Private equity unds buy companies inorder to restructure them and sell them

on or a prot a ew years later. Whilethis might be a way o nancing rms,business practices are oten questiona-ble. For example, unds oten transerthe debts incurred when taking over arm, to the rm itsel. Moreover, theshort-term interests private equity und

managers ace when restructuring arm, will oten lead to decisions that arenot in the rms long-term interests. Forexample, they may neglect long-terminvestment, or sell o valuable property(asset stripping).In 2009, the European Commission pu-blished a proposal or a new directive onalternative investment und managers(AIFM), which was heavily debated. InNovember 2010, an agreement has beenreached. Te main elements o the new

AIFM are:Compulsory registration, oversight

and potential intervention or allunds

Regulation according to the type andsize o the AIFs

Limits can be placed on AIF debt le-verage.

More transparency through repor-ting requirements to the authorities

Use o so-called depository banks toprotect investors money

Remuneration policy to discouragerisk taking


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15Te EUs current regulatory propo-sals attempt to limit, or to a limited ex-tend orbid, the most damaging andspeculative activities. However, romthe perspective o sustainable develop-

ment, AIFs should have been regula-ted and limited much more. At the veryleast, they should be ully subject to the

same rules as investment unds, banks,etc. Additionally, there should be strictrules, transparency and supervision (seealso 3.5.) in order to prevent investment,or other nancial market activities, and

prots by hedge unds not being taxedaccording to the existing taxation regu-lations in the country o operation.

Further reading:

Grith-Jones, Stephany with Pietro Calice and Carmen Seekatz (2007): New Investors in

Developing Countries: Opportunities, Risks and Policy Responses, the Case o Hedge Funds.

http://www.stephanygj.net/papers.html

Wahl, Peter (2008): Superstars in the Emperors Clothes. Hedge Funds and Private Equity

Funds: What is at Stake? http://www2.weed-online.org/uploads/hedge_private_equi-

ty_unds.pd. WEED, Berlin.

Singh, Kavaljit (2010): Fixing Global Finance. A Developing Country Perspective on Global

Financial Reorms. New Delhi: Madhyam.

http://www.madhyam.org.in/admin/tender/FGF2510.pd

3.4. Derivative trading, and ood and commodity speculation

Derivatives are nancial instrumentsthat derive their value rom the expectedtrajectory o a given commodity, sha-re, currency or other asset. Tey can be

used or hedging existing risk; however,because they are also a source o leve-rage, they are requently used in a high-ly speculative manner. For example, in-vestors can speculate on the uture pri-ce o a product, without having to buythe product itsel, which would require alarge upront cash outlay. Financial de-rivatives developed in the 1970s and ex-ploded in the 1990s (see gure 5).Te biggest rise occurred in unregula-

ted and opaque over-the-counter (OC)markets, where derivatives are traded di-rectly between two counterparties andnot publicly on exchanges. Tis boom

in OC business dramatically redu-ced the transparency o the market, andmade monitoring systematic risk, andregulation in general, extremely difcu-lt. Moreover, most OC business is notcleared through clearinghouses. Du-ring clearing, collateral is posted accor-ding to the current market value o theproduct traded, which helps limit theallout rom counterparties deaulting.


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16

Te EU increasingly recognises that de-rivatives regulation must be strengthe-ned i the nancial system is to be sta-bilised. For example, the Directive onMarkets in Financial Instruments (Mi-FID) is currently being reviewed. Pro-

posed legislative changes include themandatory use o clearinghouses or so-called standardised OC derivativecontracts. For non-standardised OCtransactions, counterparties would berequired to come to a collateral-postingarrangement between themselves. oincrease transparency, all trades wouldhave to be reported in a trade reposi-tory.For developing countries, commodityderivatives are o particular importance

(see section 2.2). Tis is also being se-riously considered by the EU. In early2010, Michel Barnier, the Commissi-oner or Internal Market and Services,said: Speculation in basic oodstus is ascandal when there are a billion starvingpeople in the world. Te EU Ministersor Development Cooperation stated inMay 2010 that to ensure ood security,they would like to examine possibilitiesor dealing with price volatility. A July

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Source: Bank or International Settlements

Figure 5: OTC derivatives trade, global daily turnover

report by the European Parliament onDerivatives markets: uture policy ac-tions calls or banning purely specula-tive trading in commodities and agricu-ltural products. In August, three Frenchministers pushed or the tighter regula-

tion o commodity markets in a letter.However, the EUs overall approach hashitherto been too cautious. Proposedlegislation will not signicantly redu-ce derivatives trading or prevent exces-sive speculation, nor will it end all opa-que OC trading. Consequently, deve-loping countries will remain exposed tospeculative attacks, systematic instabili-ty and highly volatile markets. Regulati-on that considers position limits, circuit-breakers, and possibly even banning ou-

tright speculation in certain markets,must be considered. In commodity deri-vative markets, all nancial speculationby banks and unds that results in incre-asing prices should be tackled and ban-ned, and a specialized regulatory body isneeded. Finally, rom a sustainable de-velopment perspective, the lack o spe-cial attention to the derivative tradingmarkets based on carbon emission tra-ding is worrying.


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17

Commodities Futures Trading in Chicago

Further reading:

SOMO (2010): Financing Food. Financialisation and Financial Actors in Agriculture Commo-

dity Markets. http://somo.nl/publications-en/Publication_3471

World Development Movement (2010): The great hunger lottery. How banking speculation

causes ood crises. http://www.wdm.org.uk/sites/deault/fles/hunger%20lottery%20re-

port_6.10.pd

De Schutter, Olivier, UN Special Rapporteur or the Right to Food (2010): Food Commodity

Speculation and Food Price Crises. Regulation to Reduce the Risks o Price Volatility.

http://www.srood.org/images/stories/pd/otherdocuments/20102309_briefng_note_02_

en_ok.pd

Supervision includes the oversight o -nancial markets, nancial institutions,like banks or insurance companies, andnancial products, like derivatives. Eu-ropean supervision is o global impor-tance, as European nancial institu-tions have subsidiaries and branches allaround the world, including in manydeveloping countries (see 3.1.). Te -nancial crisis has shown that ormer su-pervision was highly inadequate.Following heavy debates between mem-

ber states, the European Parliament(EP) voted on the creation o new EU-

wide supervisory bodies in September2010. In the now-approved EuropeanSystem o Financial Supervisors, threenew European Supervisory Authorities

will deal with supervision:European Bank Authority, EBAEuropean Securities and Market

Authority, ESMAEuropean Insurance and Occupatio-

nal Pensions Authority, EIOPA

3.5. The new supervisory architecture


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18 While national supervisors hold substan-tial regulatory powers, the three new EUbodies will also be o importance. Tey

will be allowed to intervene in cases obreaches o EU laws, in disputes bet-

ween national authorities, and in emer-gency situations. However, the ESAs donot have the power to enorce any ac-tion that would have budgetary conse-quences. In addition, the recently crea-ted European Systemic Risk Board will

warn, but not be able to act against, ma-cro-economic risks, such as speculativebubbles on the stock market. All thesesupervisory bodies generally do not havea mandate to consider the importance onon-nancial stability risks. For examp-le, the EU has ailed thus ar to incorpo-rate the risks posed by banking industryactivities on civil society and the envi-ronment.EU and EU member state supervisiondoes not currently adequately take intoconsideration the direct eect poor -nancial supervision in Europe can have

on developing countries and their su-pervisors. I a European bank goes ban-krupt, this severely aects the nanci-al system in all the countries where ithas branches. Tere are currently nomechanisms in place or compensa-ting developing countries or crises thatemerge ollowing the collapse o Euro-pean banks.

When European banks have branchesin developing countries, these are inprinciple supervised mainly by supervi-sory authorities o the European homecountry. When European banks havesubsidiaries in developing countries,then both home and host countries areresponsible or supervision. However,the extent to which developing coun-tries can have insight and inuence inpractice remains to be seen. Similarly,concerns remain regarding whether adeveloping country has visibility o andinuence on the unds active in theircountry, and the derivatives marketsthat aect their country.

Bank in India the EU iscurrently negotiating a ree

trade agreement with India

Further reading:

Zarrouk, Hajer / Sana Ayachi (2009): Regulatory Environment and Banking Crises: The

Case o Developing Countries. European Journal o Economics, Finance and Administrative

Science, Issue 15. http://www.eurojournals.com/ejeas_15_02.pd

Bank or International Settlements (2010): Microfnance Activities and the Core Principles

or Eective Banking Supervision. http://www.bis.org/publ/bcbs175.pd


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193.6. Trade and investment agreementsdiscrimination rules still apply when o-reign banks have received support orsurvival rom their home country, and

now compete with domestic banks thathave not received any support.

GAS, FAs and investment agree-ments also contain rules that prohi-bit controls and restrictions on the reemovement o capital in general; onlyin exceptional circumstances, such as

when in the midst o a severe crisis, aresuch restrictions allowed. Te abilityto sometimes control and limit capitalows is crucial or developing econo-mies, as shown by recent measures ta-ken by countries such as Brazil, Indone-sia and South Korea.Te EU is strongly in avour o easy ac-cess to nancial markets in developingcountries, because activity in these mar-kets is a hugely protable business orthe EUs nancial services industry. Inbilateral and multilateral negotiations

with developing countries, the EU hasbeen pushing or liberalization, even iinsufcient international or national su-pervision and regulation is in place. Te

most recent FAs signed in 2010 didnot show a change o direction.Te EU should ully and transparent-ly assess the impact o ree trade on thedeveloping world beore it continues topush or greater liberalisation. Te EUshould rst clariy to what extent theprudential carve-out rule would allowall necessary nancial reorm measures.Te EU should allow sufcient regula-tory space or host governments to regu-late oreign nancial services investors,

deal with speculative attacks, as well aswith nancial crises, and promote su-stainable development.

Luxembourg is the EUs

biggest tax haven

rade and investment agreements covernancial issues in two respects: rstly,in relation to the ow o capital, and se-

condly, in relation to nancial services.Both issues are very important or de-veloping countries. Tere are both bi-lateral and multilateral agreements. Inthe World rade Organisation, the Ge-neral Agreement on rade in Services(GAS) covers nancial services and li-beralizes nancial services trade, nan-cial products and investments in the -nancial sector. Similarly, regional or bi-lateral ree trade and investment agree-ments (FAs) can liberalize products,trade and oreign investments in the -nancial services sector.How many nancial services a (deve-loping) country liberalizes under suchrules depends on the so-called commit-ments a country decides to undertake.However, once commitments have beenmade, the ree trade rules discipline go-vernments very strictly. Tis is becau-se countries can generally only reversecommitments i they pay compensationto those countries who request compen-sation or loss o prots to their nanci-

al industry.Te non-discrimination rules inclu-ded in GAS and FAs prohibit go-vernments rom selecting which oreignbanks are allowed into their country, orinstance when they would like to givepriority to banks that are interested inpromoting universal access or the poor.Even i there is a carve-out or pruden-tial regulation, it does not permit a so-called economic needs test beore ad-mitting oreign nancial service provi-

ders, nor limits on oreign ownershipand restrictions on the size and valueo their operations. Additionally, non-


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20 Further reading:Vander Stichele, Myriam (2009): Free trade agreements contribute to fnancial and other

crises. SOMO. http://somo.nl/publications-en/Publication_3014

Vander Stichele, Myriam / Kavaljit Singh (2009): Rethinking Liberalisation o Banking Services un-

der the India-EU Free Trade Agreement. SOMO. http://somo.nl/publications-en/Publication_3220

Seattle to Brussels Network (2010): EU Investment Agreements in the Lisbon Treaty Era: A

Reader. http://somo.nl/publications-en/Publication_3558

3.7. Tax havens

ax havens are countries or so-called juris-dictions that oer low or no taxation, littleor no regulation and privacy protectionto investors, companies and individuals.Te resulting tax evasion and capital ightrom developing countries pose a majorobstacle to development. Estimates o il-licit nancial ows rom developing coun-tries range rom 250-900 billion US dol-lars every year, and the trend is increasing.In addition to illegal outows, tax compe-tition between states, to attract investorsthrough lower taxes, also causes problemsor all governments, as do companies

when they use loopholes to shit prots tolow-tax jurisdictions. Capital ight leads

to sever reductions in tax revenue and thusimpedes the nancing o public goods.Te EU has recently taken measures totackle tax evasion and capital ight. TeCommission released a Communicationon ax and Development in April 2010,calling or transparency and inormationexchange measures to stop tax evasion indeveloping countries. Tis communica-tion was supported in June 2010 by theEuropean Councils Conclusions on taxand development. Furthermore, the Eu-

ropean Parliament also put orward strongtransparency recommendations in tworecent reports, including so-called coun-try-by-country reporting. Such reporting

would require multinational companiesto disclose nancial inormation regardingtheir operations in third countries in their

Further reading:

Kar, Dev / Devon CartwrightSmith (2009): Illicit Financial Flows rom Developing Coun-

tries 2002-2006. GFI, Washington. http://www.gfp.org/storage/gfp/economist%20-%20

fnal%20version%201-2-09.pd

Palan, Ronen / Richard Murphy / Christian Chavagneux (2010): Tax Havens: How Globali-

zation Really Works. Cornell University Press.

annual nancial statements. Tis wouldprevent companies rom shiting their pro-ts between the countries in which theyoperate, in order to minimise their totaltax bill.

Within the EU, the 2005 EU Savings axDirective (EUSD) is an important toolin tackling tax evasion. It contains an au-tomatic inormation exchange provisionor EU member states, which is a prere-quisite i governments are to identiy taxraud. Te current review o this directivecould be used to establish automatic inor-mation exchange mechanisms with deve-loping countries.In June 2010, ECOFIN adopted a resolu-

tion to coordinate anti-abuse provisions inmember states tax policies. Tis coveredrules or controlled oreign corporations.Furthermore, the EU has ofcially com-mitted itsel to tax governance, requi-ring the existing Code o Conduct Groupon Business axation to be continued; thelatter aims to stop measures that constituteharmul tax competition. Several issues,

which civil society organisations have inces-santly lobbied or as prerequisites to ghtingtax evasion and capital ight, are reected

in the above-mentioned EU initiatives. Ho-wever, there is still a long way to go andmany proposals have yet to be implemen-ted. Furthermore, important rules, such asmandatory disclosure o the benecial ow-nership o all economic entities, includingtrusts and unds, still need to be included.


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213.8. The Financial Transaction Tax (FTT)tions. At their meetings in September2010, the EU Finance Ministers couldnot agree on the implementation o a -

nancial transaction tax or a bank levy.Tey will, however, continue to discussthe issue on the EU and G-20 level.In October 2010, the IMF also relea-sed a sta paper on the F. Te pa-per acknowledges that an F wouldbe technically easible to implement.Tis admission is a key development,as those opposed to the tax requentlyclaim that it would be impossible to ad-minister. Moreover, incorporating thetax into settlement and clearing proce-dures, would mean that only minimal,rather than universal, international co-ordination would be necessary. Tis isbecause there are only a ew institu-tions that provide such services, andbanks will not boycott settlement andclearing simply to avoid the tax, becau-se these processes dramatically reducethe risk o large losses rom counterpar-ties deaulting. Te OC product clea-ring industry is a lso a natural monopo-ly, which will limit new entry to thismarket.

On a global level, support or the Fis equally divided. Te Canadian go-vernment has voiced strong oppositionto introducing a bank levy or a nanci-al transaction tax, arguing this wouldpunish its banks, which were sufci-ently prudent and were not aected bythe crisis. Countries such as India alsoargue that better regulation would bepreerable over increased taxation. Ho-

wever, a F would not destabilise themarkets, and would be a very progres-

sive tax, with minimal global co-opera-tion. When restructuring the nancialsystem, it is imperative the EU ensurethe new order is airer.

Te need or nancing developmentand climate change adaptation couldbe addressed by a Financial ransac-tion ax (F). Tis measure wouldalso penalise, and thus help depress,high-requency trading by speculatorsand thus lessen volatility. Te basic ideaunderlying the F is to tax the tra-ding o all nancial assets, e.g. shares,bonds, derivatives and currencies. Ba-sic retails transactions, such as currentaccount transactions, and central bankoperations would be exempt rom thetax. Te tax rate would be set at a verysmall rate, so as to avoid dramaticallyreducing market liquidity. Estimatessuggest that a F could generate twohundred billion to one trillion dollarsglobally, and approximately 118-178billion dollars in the EU alone. Tere-ore, the F would become an impor-tant source o development nancing.

A growing number o inuential eco-nomists, such as Nobel-laureates PaulKrugman and Joseph Stieglitz, havespoken out in avour o a F.Political support or this idea has grownthroughout Europe and beyond. At

the EU summit in June 2010, the EUheads o state agreed that EU memberstates wanted the G-20 to urther ex-plore and develop the introduction oa global nancial transaction tax. EUinstitutions have been divided on theissue o the F, with the EuropeanParliament supporting it and the Euro-pean Commission rather opposed to it.In October 2010, the European Com-mission released a working paper rat-her critical o the F, both or eco-

nomic and political reasons. However,the paper supports a F on a globallevel and calls or a so-called Financial

Activities ax on prots and remunera-

Further reading:

Schulmeister, Stephan / Margit Schratzenstaller / Oliver Picek (2008): A General Financial

Transaction Tax. Motives, Revenues, Feasibility and Eects. Vienna.

Schulmeister, Stephan (2010): Bank levy versus transactions tax: A critical analysis o the

IMF and EC reports on fnancial sector taxation. Vienna.

Leading group on innovative nancing or development: http://leadinggroup.org


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22 3.9. CurrenciesTe existence o dierent currencies hasconsiderable eect on the relationshipbetween the respective economic areas.

Exchange rate volatility undermines in-vestment in developing countries. It in-troduces uncertainty into domestic -nancial planning, and oreign investorsadditionally worry that the value otheir assets may collapse due to hyperin-ation. Exchange rates can be xed viagovernment intervention, or allowed tooat reely. Both systems have their ad-vantages and disadvantages. A xed sy-stem can ail in reecting economicundamentals. But when exchange ratesoat reely, the accompanying volatility,

which can be exacerbated by speculati-on, can also cause problems. Currencycrises have become more requent since

the xed exchange rate system set up a-ter World War II was abandoned in the1970s.Developing countries generally pegtheir currencies to a stable, developedcurrency, usually the US dollar, in anattempt to prevent ination. However,this system is vulnerable to speculativeattacks, as speculators may aggressivelydrive down a currency in the hopes thatthe government will not be able to coun-ter the move, and, thus, will allow thecurrency to devaluate. Consequently,developing countries build up large o-reign exchange reserves (see gure 6),

which they then use to buy, and thussupport, their own currency when it isdevaluating, either naturally or as a re-sult o speculative attacks.

Ater World War II, the US dollar was es-tablished as the worlds leading currency.Consequently, most globally traded com-modities, such as oil, are denominatedin US dollars. In this respect, a leadingcurrency helps acilitate international tra-de. However, this also means the worldeconomy is dependent on the dollar, and

problems in the U.S. economy are rapidlytransmitted through to other countries.Te supremacy o the dollar has been

0

1000000

2000000

3000000

4000000

5000000

6000000

7000000

8000000

9000000

1995 1997 1999 2001 2003 2005 2007 2009*

$million

World Advanced economies Emerging and developing economies

Figure 6: Ocial oreign exchange reserves


weakened by the establishment o theeuro and, in recent years, by the rise oChina and other emerging markets. Tisemerging multi-polar system reduces theproblems introduced by dollar hegemony,but also leads to a more complex system.It could thereore also potentially be de-trimental to the real economy, in particu-

lar in developing countries.Since exchange rates are a problem ortrade, investment and debt servicing,


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23various means or dealing with them atthe macro level have been attempted.One is the creation o a single curren-cy, as advocated by Keynes in 1944.For example, the Euro was established

or precisely this purpose. In regions oAsia and Latin America, similar regio-nal currency unions are also being con-sidered. However, it is also worth ex-ploring the possibility o expandingthe role o the IMFs special drawingrights, a synthetic oreign exchange re-serve derived rom the value o a bas-ket o currencies. Another possibility isa coordinated global exchange rate sy-stem, e.g. through ination adjusting,

as well as the use o capital controls (seealso chapter 3.10).O course, any process o currency inte-gration would take a long time. Te mainproblems are the dierences in the eco-

nomic strength o various national econ-omies. I a stronger economy and a weak-er economy come under the same curren-cy, the weaker one loses its competitive-ness. As long as these dierences persist,having a national currency allows devalu-ation o decit countries currencies andappreciation o surplus countries curren-cies. However, within a common policyramework o cooperation, dierent eco-nomies could be harmonised over time

Further reading:

UNCTAD (2010): Global monetary chaos: Systemic ailures need bold multilateral responses.

Policy brie. http://www.unctad.org/en/docs/presspb20102_en.pd

Ambrose, Soren / Bhumika Muchhala (2010): The problem o reserves in developing coun-

tries. http://www.twnside.org.sg/title2/resurgence/2010/234/cover04.htm

3.10. Capital controls

Free movement o capital is a core com-ponent o economic integration in alli-

ances such as the European Union. Ho-wever, the ree ow o capital can alsocreate problems, particularly or develo-ping countries, as it can quickly reverse,or make countries dependent on oreigninvestors and global markets. Tereo-re, capital controls have been commonsince 1945. As Keynes noted during the

war, control o capital movements bothinward and outward should be a perma-nent eature o the post-war system.

With the collapse o the Bretton Woods

system in the 1970s, capital controlswere considered to be backward or pro-tectionist, and incompatible with a mar-ket economy. However, ater the Asi-an crisis in 1997/1998, questions aroseas to whether the liberalization o capi-tal accounts was a sensible policy in alleconomic conditions. Malaysia, whichimposed controls, was better o duringthe crisis than countries like Tailand,

which did not. Other countries, such asChina and to a certain extent also India,

did not liberalize their nancial mar-kets. Hence, they were not or only indi-rectly aected by the Asian crises.

Capital controls are one o the best in-struments to ensure that capital ows

serve sustainable development. In a wor-king paper rom February 2010, eventhe IMF stated that capital controls oncertain types o inows might useullycomplement prudential regulations tolimit nancial ragility and can be parto the toolkit. In particular, by helpinguel credit booms, especially in oreigncurrency, debt liabilities, including debtrecorded as nancial FDI, seem to bringsignicant vulnerabilities to the econo-my. (see below, Ostry et al.)

Capital controls can also increase theamount o capital available to govern-ments and companies in the developing

world, by limiting the extent to whichtheir domestic investors can invest over-seas. Most importantly, capital con-trols help prevent large streams o capi-tal suddenly owing into a country, andthen, at a later date, rapidly owing outo the country. Such events are highlydestabilising, and not conducive to su-stainable development. Many countries

are now implementing capital controls.For example, Brazil imposed a tax o 2%on capital inows in October 2009, and


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24

increased it to 6% in 2010, to deter car-

ry trade activity. In 2010, South Koreaand Indonesia introduced currency con-trols to protect themselves.Te goal should not be to stop all in-ternational capital ows. Capital move-ments should simply be monitored andregulated. Te EU must learn rom pre-vious crises, and end its dogmatic dis-missal o capital controls. At the mo-ment, EU trade and investment agree-ments impose the EUs own rules o

reedom o capital movement on de-

veloping countries, which only allowor temporary interventions to restrictcross-border capital movements and,even then, under strict conditions. Te-reore, the EU should stop pushing orthe liberalization o capital accounts inthe GAS negotiations and in bilateraltrade and investment agreements. Sole-ly emerging and developing countriesshould be responsible or how ar they

want to liberalize their capital accounts.

Further reading:

Ostry, Jonathan D. / Atish R. Ghosh / Karl Habermeier / Marcos Chamon / Mahvash S.

Qureshi / Dennis Reinhardt (2010): Capital Inows: The Role o Controls. IMF sta paper.

Washington. http://www.im.org/external/pubs/t/spn/2010/spn1004.pd

Singh, Kavaljit (2010): Fixing Global Finance. A Developing Country Perspective on Global

Financial Reorms. New Delhi: Madhyam. http://www.madhyam.org.in/admin/tender/

FGF2510.pd


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25

Containership

3.11. Trade imbalances

Global imbalances are oten quoted asbeing one o the causes o the currentnancial crisis. One specic type o im-

balance is the ocus o attention: oreigntrade imbalances, i.e. the act that cer-tain countries export much more thanthey import. Inversely, other countriesimport much more than they export. Isuch an imbalance continues over time,it leads to substantial current accountsurpluses on the one side and decits onthe other.

A country which has a permanent de-cit accumulates debt, whereas the sur-plus countries become creditors o thedecit countries. Looking at the statis-tics, one can see that the major surpluscountries are China, Germany and Ja-pan, whereas the biggest decit coun-try is the US. Te US nanced this de-icit through treasury bonds. Te Chi-nese were the biggest purchaser o thesebonds, accumulating an unprecedentedsum o reserves: 2,998 trillion US dol-lars in 2009. Tese imbalances can a-ect other important economic parame-ters, such as exchange rates, currency re-serves, interest rates and labour markets,

and in the end, the economy as a whole.Running a trade surplus can be attrac-tive or a developing country in order tocatch up with the industrialised world,as shown by China, where low wages anda high savings rate are used as a compara-tive advantage to uel development. Ne-vertheless, surpluses like decits canbe a problem i they continue over time.Frequently, a surplus may be a sign o trueeconomic perormance, but the averagecitizen pays the price with stagnating or

even shrinking wages. Or, as the exampleo China shows, a huge surplus is mirro-red by a huge decit.

Tis issue o imbalance has to be dealtwith at a global level, especially withinthe G-20. Mechanisms need to be put inplace to eliminate this unsustainable si-tuation. Tis is only possible through e-

orts centred on both trade and nance,including capital controls and curren-cy measures. O course, the EU is notthe dominant player here, unlike theUS and China. However, the EU canalso make a dierence, beginning withinternal imbalances. At the internatio-nal level, the US has proposed to limitthe trade decit to a certain percentageo GDP. Such initiatives should also be

considered in the EU.

Further reading:

Flassbeck, Heiner / Massimiliano La Marca (2009): Global imbalances and destabilizing

currency speculation. Journal o Business, Finance and Economics in Emerging Economies,

Vol 4, No 1. http://vi.unctad.org/uwist08/sessions/tue0513/assbeckglobimb.pd

UNCTAD (2010): Trade and Development Report 2010. Geneva.


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26 4. Conclusion:Towards a global nance system at theservice o sustainable development

Tis brochure has outlined the most important eects o EU nancial reorm onsustainable development. Currently, reorms do not adequately mandate the nan-cial sector to contribute towards the transition rom an unequal, socially and envi-ronmentally destructive economic system, towards a new nancial model that sup-ports airness and sustainability.

o summarize, the EU should take the ollowing reorm goals into account:

Considering sustainability and the precautionary principle in all reorms.

Ensuring ull transparency o EU nancial operators and markets.

Comprehensively regulating all nancial actors to prevent shadow banking.

Deleveraging the nancial system, especially the banks.

Introducing restrictions on speculators and speculative products, especially incommodities markets.

Supervising European banks operating in developing countries.

Permitting prudential capital controls in ree trade and investment agreements.

ackling tax evasion and tax avoidance, and increasing progressive taxation owealth.

Facilitating innovative development nancing via a Financial ransactions ax.

Pushing or greater international cooperation on exchange rates, trade imbalan-ces and capital ows.

Giving developing countries a greater say in international decision-making pro-cesses and in supervision.

Tere is a long road to travel beore a sustainable economy can be realised. Howe-ver, given the vital importance o this goal, it is crucial that the European Uniondoes not shy away rom taking a leading role. Te current nancial crisis has en-gendered unprecedented political and public will or reorm; this once-in-a-lietimeopportunity must be seized.


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27General resources and urther inormationThis section provides general resources or ollowing the debate on fnancial reorms.An update on the ongoing reorms is provided in a bi-monthly newsletter on EU nancial reorms,which can be subscribed to on the SOMO websitehttp://somo.nl/dossiers-en/sectors/nancial/eu-nancial-reorms/newsletters/subscribeor by emailing Myriam Vander St ichele: [email protected], there are several email list serves:

On commodity speculation and derivatives reform globally: email [email protected]

On commodity speculation and derivatives reorm in the EU: email [email protected]

On the Financial Transactions Tax (FTT): email [email protected]

Ocial websites:

Bank or International Settlements: http://www.bis.org

Council o the EU: http://www.consilium.europa.eu/showPage.aspx?id=&lang=en

European Parliament (EP): http://www.europarl.europa.eu

European Commission (EC): http://ec.europa.eu/index_en.htmFinancial Stability Board: http://www.nancialstabilityboard.org

International Monetary Fund: http://www.im.org, UNCTAD: http://www.unctad.org,

World Bank: http://www.worldbank.org

The project members Towards a Global Finance system at theService o Sustainable Development:

Association Internationale de Techniciens, Experts et Chercheurs (AITEC): http://aitec.reseau-ipam.org

Centre or Research on Multinational Corporations (SOMO): http://somo.nl

Glopolis: http://www.glopolis.org

New economics oundation (Ne): http://www.neweconomics.org

Vdegylet: http://www.vedegylet.hu

World Economy, Ecology & Development (WEED): http://www.weed-online.org

Other NGOs working on fnancial and sustainability issues:

Bretton Woods Project: http://www.brettonwoodsproject.org

Campagna per la riorma della banca mondiale (CRBM): http://www.crbm.org

Corporate Europe Observatory (CEO): http://www.corporateeurope.org

Friends o the Earth: http://www.oe.org

Re-Defne: http://www.re-dene.org

Word Development Movement (WDM): http://www.wdm.org.uk

Networks and campaigns:

European Network on Debt and Development (EURODAD): http://www.eurodad.org

Europeans or Financial Reorms: http://europeansornancialreorm.org

Make Finance Work: http://www.makenancework.orgRegulate Finance or Development: http://regulatenanceordevelopment.org/homepage

Rethinking Finance: http://rethinkingnance.org

Seattle to Brussels Network: http://www.s2bnetwork.org

Tax Justice Network: http://www.taxjustice.net

On US reorms:

Americans or Financial Reorms: http://ournancialsecurity.org

Institute or Agriculture and Trade Policy (IATP): http://www.iatp.org

Commodity Futures and Trading Commission: http://www.ctc.gov

Developing countries views:

Focus on the Global South: http://www.ocusweb.org

Madhyam: http://www.madhyam.org.in

South Centre: http://www.southcentre.org

Third World Network: http://www.twnside.org.sg


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ISBN 978-3937383-74-3

Towards a Global Finance System at the Service of Sustainable Development

Documents

Towards a Global Finance System at the Service of Sustainable Development