Part of the crisis Europe is going through directly results from decades of financial deregulation.
Financial markets & economic crisis
Companies working with financial markets – banks, hedge funds, insurances – were allowed to do whatever they saw fit to raise their shareholders’ revenues. This included trading in very risky operations that were however considered extremely safe investments by the authorities in the matter: the rating agencies.
When the risky trading operations eventually turned bad, the speculative bubble burst, first in the US, spreading then to Europe and the rest of the world.
Europeans for Financial Reform
In order to prevent future crises, the financial sector needs to be properly regulated. The last decades have shown that markets are not capable of self-regulation and how this can seriously affect tax-payers.
The PES is part of the coalition Europeans for Financial Reform (EFFR) that aims at regulating the financial sector and making sure it works for all citizens.
Financial Transaction Tax
Together, EFFR organizations have succeeded in putting a Financial Transaction Tax (FTT) on the EU agenda. After a two-year campaign, EFFR will now follow-up the official announcement by the European Commission of a European FTT, to be implemented in the years to come. The proposal by the Commission is a good first step, but many loopholes remain in the draft directive.
European Credit Rating Agency
In order to tame financial markets, the PES is also actively campaigning with EFFR for a European Credit Rating Agency.