Financial Regulation

As crisis looms, this analysis tracks Europe’s failed record on banking reform since 2008, exposing the opportunities missed along the way.

“How is all of this going to be paid for?” This difficult question has struck campaigns for the advancement of welfare since the 1970s, ever more frequently and intensely since the financial crisis of 2008 and resulting austerity measures that were put in place in our European liberal societies.

It is no secret that the lobbying might of financial institutions has shaped regulatory rules at national, European and global level. But did the disaster of the 2007 financial crisis change this? The honest answer is that the old institutions are still up to their old tricks, and a change in how we make policy is needed if we are to avoid a repeat of the crisis.

An interview with Philippe Lamberts, Green MEP and member of the Committee for Economic and Monetary Affairs, who along with his colleague Sven Giegold, is one of the main actors in the struggle against mainstream financial orthodoxy.

While progress towards a more resilient financial system has undoubtedly been achieved at EU level, it remains nonetheless much too incomplete. The challenge is all the more significant as our system, more than ever, remains dominated by banks that are too big or too interconnected to fail and therefore too dangerous to exist.

The analysis and publication by journalists of previously confidential data from known tax havens – widely known as “Offshore Leaks” – has excited media interest around the world.

If we want to put finance on a leash with smart regulation, Greens must take the wind out of their opponent’s sails by having policies that simultaneously unleash finance and restore lending into the real economy and, above all, into a green industrial transformation.

Over the past decades, markets have invested in damaging industries such as fossil fuels and financial speculation. This has contributed to unsustainable development, and may well be creating an enormous ‘carbon bubble’. However, there are steps we can take to stop this bubble turning into another subprime-style crisis.

The lessons of the last crisis always seem to be forgotten, and the financial world continues to grow and pose a risk to economy and planet. We Greens must marshal all our energy and ideas to reign it in.

5 years after the bankruptcy of Lehman Brothers, and the beginning of the worst economic crisis in decades, the EU has not delivered on promises of strong regulation of the financial sector. A swift overhaul is needed.