The G20 Finance ministers meet in Gyeongj (South-Korea) from 22 to 23 October 2010 to prepare the G20 Summit in November where important decisions on financial reforms should be taken. A new report by Kavaljit Singh provides a critical analysis of the financial system and the financial crisis from a civil society perspective, which is still too little heard in official decisionmaking like the G20.
The report Fixing Global Finance - A Developing Country Perspective on Global Financial Reforms makes numerous interesting and concrete recommendations about what financial reforms are still needed from a perspective that promotes sustainable development. The report recommends restrictions on cross-border capital flows to deal with the current turmoil in the currency markets and current conflicts about state interventions by G20 members to keep currencies low. Other recommendations in the report include strict regulations of financial markets and speculators such as hedge funds and private equity funds.
In the short briefing note Financial reforms from a developing country perspective SOMO indicates how the recommendations have implications for the financial reforms in the EU and the EU´s relations with developing countries. For instance, the EU should not prevent restrictions on capital movements through free trade and investment agreements but impose a financial transaction tax. The EU should ensure that new EU structures for supervision of banks will cooperate with supervisors from developing countries. The report’s recommendations show the urgent need for new or revised EU regulations – which still need to be proposed - on all derivative markets, innovative financial products and transactions, excessive speculation and financial market manipulation.
Overall financial stability should be considered as a common good at the service of sustainable development, which can only be achieved if the EU cooperates fully at the international level and has financial and economic policies which also benefit developing countries.
The EU financial reforms are far from over and their progress can be monitored through the Newsletter on EU Financial Reforms whose latest issue was published on 8 October 2010.
The numerous publications and media articles by Kavaljit Singh can be viewed here.