Towards a Global Finance System at the Service of Sustainable Development

The global debate over financial reform is still ongoing. In the European Union (EU), some reforms have now been implemented, but these frequently are only half-measures and, thus, do not offer adequate protection against future turbulence. However, EU financial reforms must facilitate progress towards global sustainable economic development. Furthermore, reforms will not only affect the EU; they will also strongly impact on developing countries. Consequently, the EU should prioritise the following goals:

• Considering sustainability and the precautionary principle in all reforms.
• Ensuring full transparency of EU financial operators and markets.
• Comprehensively regulating all financial actors to prevent shadow banking.
• Deleveraging the financial system, especially the banks.
• Introducing restrictions on speculators and speculative products, especially in commodities markets.
• Supervising European banks operating in developing countries.
• Permitting prudential capital controls in free trade and investment agreements.
• Tackling tax evasion and tax avoidance, and increasing progressive taxation of wealth.
• Facilitating innovative development financing via a Financial Transactions Tax.
• Pushing for greater international cooperation on exchange rates, trade imbalances and capital flows.
• Giving developing countries a greater say in international decision-making processes and in supervision.