What's missing in the response to the global financial crisis?

Almost 30 months after the financial crisis started to really kick in, we still sense that global leaders, especially G-8 and G-20, lack the clarity of vision required to move on from Capitalism v2.2, the ultra-free market version which has ruled to roost since the 1980s, to a more sustainable economy that locates social and environmental sustainability as core priorities.

Some progress is being made, the shift of power from G-8 to G-20 being a minor example, but even this step does not go nearly far enough to engage wider constituencies in the process of redesigning the global financial architecture.

In advance of the G-8 and G-20 summits in Huntsville and Toronto, Canada, in June this year, our colleagues at the Halifax Initiative have issued a policy paper which draws together recommendations on a range of issues that need to be addressed as part of the process of building integrity into the financial system. Many of these issues were discussed at a conference hosted by the Halifax Initiative in Autumn 2009 on the theme of "What's missing in the response to the global financial crisis? Rethinking the international financial system during a time of crisis". (You can find the conference proceedings, including podcasts of the speeches of participants like Jo Marie Griesgraber, Raymond Baker, Oscar Ugarteche, and many other friends of TJN here.)

The recommendations cover a wide spectrum, including proposals for a new global currency reserve system, strengthening the democratic accountability of the World Bank, IMF and other international financial institutions, radically rethinking emergency funding support for poorer countries to allow them greater control over how funding can be used, and other recommendations that we in civil society have been promoting for many, many years.

Prominent amongst the recommendations to both G-8 and G-20 are proposals to carry forward the programme to roll back the activities of secrecy jurisdictions, which continue to rot the integrity of globalised financial markets. Here is the relevant section from the summary of proposals:

Canada should continue to work with G-20 countries to do the following: put in place measures to tackle secrecy jurisdictions, and more specifically, advocate for the adoption of automatic information exchange procedures along the model adopted by the European Union; promote country-by-country reporting on accounts by multinational companies; and ensure alternative sustainable development paths for jurisdictions which have become dependent on financial secrecy. Instead of relying on the OECD approach, Canada should support the establishment of a full intergovernmental UN Committee of Experts on International Cooperation in Tax Matters.

We welcome the inclusion of these recommendations, and look forward to working with our Canadian colleagues to advocating for their advancement by G-8 and G-20 during the coming months.