NFU News

Global trade unions adress the Financial Stability Board

When the Financial Stability Board meet in Hong Kong May 29-30, they are called upon by global trade unions to raise its ambition to curb the crisis. It is UNI Global Union, the International Trade Union Confederation and the Trade Union Advisory Committee to the OECD who have agreed on a joint statement. The statement raises the following issues:

Ending “too big to fail” …effectively! The G20 leaders have already committed to “make sure no financial firm is “too big to fail” and that taxpayers should not bear the cost of resolution”. But the trade unions mean that the toolbox needs to be enhanced if indeed citizens are to be protected. The current FSB regulatory package needs to be broadened to include structural measures to limit the size and complexity of banks’ balance sheets. The banking activi­ties that serve the real economy (retail banking, long term project finance) need to be shielded from the risks associated with the trading and investment banking activities.
Ensuring sustainable access to finance. Four years into the crisis, access to finance for households, small and medium size enterprises and infrastructure projects remains excessively problematic in a majority of G20 economies. This is parti­cularly true for Europe whose financial system relies extensively on bank interme­diation to finance the economy.

The FSB must pursue banking regulatory tightening through effective implementation of Basel III. But it needs to ensure more diversified financial service systems as well.
Curbing speculation. The FSB needs to pay greater attention to financial speculation which is left unad­dressed in the G20 Action Plan. The trade unions believe that the creation of a financial transaction tax (FTT), as suggested by the European Commission, would go a long way in eliminating the most extreme forms of speculative trading.

Empowering consumers, ensuring responsible sales practices and promoting alternatives to for-profit finance. Workers and households need to be better protected against predatory sales practices. The High Level Principles on consumer finance protection which were endorsed by the G20 Summit in Cannes need to be reviewed and improved to effectively empower consumers and ensure financial services providers adopt responsible sales practices. Sales culture in the banking sector needs to change.

Related news