A decade on: how confident can we be there won’t be another major global financial crisis?

During a meeting of the UNI Finance World Steering Committee, UNI Global Union General Secretary, Philip Jennings warned against the dangers of sleepwalking into another financial crisis of 2008 proportions.

The UNI GS took the floor after the President of UNI Global Finance Rita Berlofa had painted a grim picture of the profound risks created by the financialisation of the economy. She described a world where eight men own the wealth of  50% of the world’s population and just 147 financial institutes control 40% of the market.

 

Berlofa said, “It is a system which is based on exploitation of natural resources and  people. Their aim is to criminalise the union movement and fuel prejudice in order to maximise profits and power in the hands of the few. The result is that we face losing millions of jobs and very little is being done about the regulation or supervision of the financial institutions which drove the financial crisis of 2008. That is why UNI Global Union and all our affiliates must demand change before its too late. We must go beyond solidarity and move for change and a fair distribution of wealth in all our regions. UNI Finance is committed to taking a lead on this odyssey.”

UNI General Secretary took up the theme of the threat of another financial crisis, almost a decade on from 2008. Jennings said that Deutsche Bank economist Jim Reid had recently spelt out possible tipping points for a new full blown crisis.

Jennings said, “Reid’s report spells out a number of significant sources of the next financial crisis: central banks unwinding quantitative easing, potential crises in China, Italy and Brexit, elevated global trade imbalances and a backdrop of populism. These are some of the potential cracks in the financial system which could result in a full blown global financial and economic crisis. These are warnings that must act as lighthouse if we are to avoid another financial crash.”

The UNI GS said despite this bleak assessment, there were glimmers of hope – not least the recent G20 declaration which promoted global framework agreements between unions and multinational companies. Jennings said, “There is tremendous potential in the finance sector and we may see a domino effect as more banks recognise the importance of having human rights at the heart of their organisations. Due diligence on human rights for companies is now a legal requirement in France and we may well see it spreading to other countries. UNI has around 50 global framework agreements and we expect more in the run up to our World Congress in Liverpool next June.”