3-05-09, 12:02 pm
Original source: Akahata (Japan)
With the 2nd G20 summit set for early April in London to deal with the financial turmoil, work on international rules has begun with a view to restructuring the global financial markets.
The European Union (EU) held an emergency meeting in February and published a statement calling for stricter oversight or regulation and oversight on all financial products and participants.
Need to restrict financial speculations
The EC summit statement follows the emergency summit meeting held in Washington last November in calling for “all financial markets, products and participants” to be subjected to appropriate oversight or regulation”.
The Washington financial summit last year testified to the fact that the world cannot put off creating international rules in order to tackle the financial crisis that originated in the United States due to the failure of neo-liberal financial models that leave everything to market forces. However, the rulemaking was shelved because the then US Bush administration opposed the idea of regulating private financial activities such as hedge funds. It will be taken up again at the upcoming London summit.
Prime Minister Aso Taro, who participated in the Washington summit, said, “The financial crisis has broken out because regulation fell behind the emergence of new financial products and globalization.” Yet, he kept siding with the Bush administration in emphasizing the need to maintain the principle of giving the market freedom and keeping the US dollar as the key currency of the world.
Three months have passed since the Washington meeting, but there has been no concrete action to establish international rules due to the deepening global recession that has forced the countries concerned to take immediate measures to stimulate their own economies, prevent financial institutions from going bankrupt, or recover the functions of their financial markets.
The Obama administration was recently inaugurated in the United States. On February 10, the new administration published a “financial stabilization plan.” Although it includes plans to use public money to rescue financial institutions and buy out their bad loans with government-private funds, the US stock market continues to nose-dive.
In the G7 meeting in Rome in mid-February, finance ministers and central bank governors agreed on measures to simultaneously increase public spending and stabilize financial markets while recognizing that financial turmoil is affecting the real economy and spreading all over the world.
Under then Finance Minister Nakagawa Shocihi, who resigned over his inebriated behavior at a news conference after the G7 meeting, Japan also continued to give major banks, large corporations, and the wealthy favorable treatment using public funds and giving them tax breaks. So far, Japan has hardly contributed to the international rulemaking for straightening out financial markets, except for its funding to the IMF.
Reform global money flows
The world is faced with the need to accelerate efforts to establish international rules for international financial market reform and financial rulemaking.
As well as immediate monetary measures, it is necessary to impose more drastic and stricter restrictions on hedge funds and establish an international agreement that crude oil and grain, both vital for human existence, must not be manipulated for speculative purposes. Doing this is a pressing global challenge to get out of the excess of casino capitalism and overcome the present financial crisis.
