Financial crash remembered
This past Saturday it was ten years since the Lehman Brothers crash. Its bankruptcy has come to symbolize the financial crisis of 2007-2008. And for good reason. Lehman’s downfall was the moment when the seemingly impossible became a reality, as one of the world’s biggest investment banks actually went down.
Credit markets across the world froze in horror. Would the global financial system collapse? It did not, but the implications for the global economy were severe. Trade fell all over the world, credit supply plummeted, public debt soared sky-high, and hundreds of thousands of finance jobs were lost.
This also had far-reaching consequences for NFU. Since then, the bulk of NFU’s activities has been directed towards influencing EU financial regulation. Ten years down the line, we still work daily with much of the same topics. How come?
In response to the crisis, the EU rolled out an ambitious financial reform program. Over 40 new legislative proposals have been tabled changing all areas of European financial markets through its tens of thousands of pages of new legal text. Many of the new rules have a direct impact on finance employees. They challenge the way wages are set in the sector. They change the way finance employees advice on products and services. They impact the work environment through compliance pressure, but also by increasing protection and setting up channels for whistle blowing. Indirectly, they affect the framework conditions in the financial sectors through capital and governance regulation.
In addition, the EU has created a complex financial governance architecture to manage the new rules. European supervisors, the European Central Bank, global norm-setters such as the Financial Stability Board and the Basel Committee, the European Commission as well as the European Parliament and other political bodies – all coordinate and interact to shape what finally is made into national law by our respective Nordic governments.
These two main elements – the regulation, and the way it is created and updated – requires a coordinated response by trade unions. Firstly, because EU law-making effects everyday working life in the financial sector. Secondly, because one country and sector alone cannot expect to influence the direction of new regulation and safeguard employee interests. And thirdly – because EU legislators have often failed to analyse the impact of new rules on finance employees. This failure is being felt by Nordic finance employee on a daily basis, as can be seen in the NFU report on compliance published earlier this year.
The situation needs to change, and NFU is working on it. Together, the Nordic countries represent the world’s tenth largest economy – and 150 000 organised finance employees. The Nordic brand is strong in in Europe and the world. As unions we can and are using that to our advantage. Based on our high union density, legitimacy, and adaptability, we present sustainable solutions that help make our economies and financial markets at the same time competitive and responsible.
Finance employees are at the heart of the continued efforts to develop financial sectors that support sustainable economic development. If finance is the blood stream of the economy, employees are the red blood cells without which no oxygen can flow. Ten years down the line from the worst financial crash in history, NFU still maintains this to all key stakeholders – legislators, supervisors, employers, consumers and more – that the employee dimension in finance needs to be taken to its full potential through fair and balanced regulation, investments in quality jobs, and promotion of green and social sustainability. All these elements are necessary building blocks of tomorrow’s financial sector.