Rethinking FinanceAlternative voices for a new financial architecture

This backgrounder on the financial transaction tax, by Max Lawson, is intended to be a general update for campaigners around the world keen to see what progress can be made on achieving a tax on financial transactions.

This briefing paper is intended to provide information and background on the upcoming United Nations Conference on the World Financial and Economic Crisis and its Impact on Development which will take place from 1 – 3 June at UN Headquarters in New York.

Since the current financial crisis started, none of the governments, experts or media who have called for new regulations for the financial industry have taken into account rules of the World Trade Organisation (WTO) which actually impose extreme financial service deregulation on many WTO member countries. Worse, the heads of the G-20 country governments called for finalising the WTO’s current ‘Doha Round’ of negotiations to liberalise trade.

Many political leaders have been calling for the conclusion of the ‘Doha Round’ negotiations in the World Trade Organisation (WTO) as a solution to the financial crisis, in order to provide a boost to the world economy and a signal of confidence to multilateralism.

While the financial crisis and its consequences are spreading around the world and even the most erstwhile ‘free market’ governments are discussing how to re-regulate the financial sector, bilateral and regional ‘free trade’ agreements continue extreme deregulation of the financial industry.

IMF crisis loans chart

This report sets out evidence on the impacts of unregulated finance on developing countries, arguing that increased regulation and different policies are needed as a matter of justive and to improve stability for citizens in richer and poorer countries