G20 must finally take steps towards a sustainable financial system

Berlin, 30.11.2016.

On the occasion of Germany's G20 presidency, which begins tomorrow, WEED criticises the fact that the heads of state and government of the G20 countries have not yet achieved a sustainable financial system despite all the reforms that have been agreed.

"The financial markets still pose a major risk, regardless of whether you look at the banks or the capital markets," says Markus Henn, Advisor on financial markets at WEED. "Nevertheless, the German government does not want to provide any new impetus for financial market regulation at the G20; it only wants to continue the current, inadequate processes. The big banks must finally be reduced to a controllable level and their unweighted credit leverage severely limited. Instead of preserving these megabanks, we should support municipal and co-operative banks much more globally," says Henn.

One focus of the German presidency is to be a summit for a "Compact with Africa" in June 2017. "Obviously, the main aim is to attract private investors to Africa," says Henn. "But not every private investment brings sustainable development. It must be ensured that local society benefits and the environment is not damaged. Public-private partnerships are particularly problematic, as the states usually pay even more here than with public financing, while at the same time retaining high risks and the performance is usually worse than promised."

The German government often promises sustainability. However, Henn criticises: "If the German government is serious about this, it should advocate binding sustainability rules, including compliance with human and labour rights, for all types of financing, whether from banks or the capital market. Instead, the government continues to back investor-state lawsuits, which put every sustainability and stabilisation measure at risk of being sued."

Contact:

Markus Henn, Advisor Financial Markets, markus.henn@weed-online.org, Tel. 0176-37630916