When G20 financial leaders meet in Paris on Friday, they need to address the root cause of the crisis – irresponsible lending practices which grew out of control. If you were at the meeting, what would you tell them?
Default, downgrade, bailout, recession, debt crisis. Unless you ignore the news, it’s difficult to go a day without being bombarded by these words. It feels like it’s been the same ever since irresponsible mortgage lending in the US led to the collapse of Lehman Brothers and set off a domino-like effect across the global banking system three years ago.
G20 leaders meet in Paris
In an attempt to end the crisis, world leaders seem to hold an endless number of meetings desperate to give the impression that there’s still money left at the bottom of treasury chests, or that their IOUs can still be exchanged for cash somewhere and somehow.
We’ll no doubt see more of the same when G20 finance ministers and central bank governors meet in Paris this week. At Which? we want G20 leaders to address the root cause of the crisis: the regulatory failure that allowed irresponsible lending practices to flourish.
Better consumer protection in financial services will not only ensure the welfare of consumers when they go about their daily banking, but it will also help stabilise the global economy.
For over a year we have been campaigning for this with consumer organisations from other G20 countries, as change isn’t only needed in the UK, it’s needed around the world. It’s not enough for individual countries to have their houses in order – complex supply chains for financial services mean that UK consumers can be exposed to poor standards of consumer protection internationally.
For instance, buyers of a so-called ‘Secure Income Bond’ from a UK building society were actually purchasing bonds issued in Luxembourg, with the proceeds used to purchase life insurance policies in the US. Got that?
Your money needs better protection
Following our successful campaign around last year’s G20 Summit, global leaders agreed to investigate how to improve consumer protection in financial services. The OECD and the Financial Stability Board were tasked with this job and have been developing a set of reports, which we’ve fed into throughout the process.
And although we welcome these reports as a first step, a lot more needs to be done. That’s why we’re calling on the UK Chancellor to show leadership and champion consumer interests when he meets his international colleagues in Paris.
How has the economic and financial crisis affected you and your financial situation? Do you go about your personal finances in a different way compared to a few years ago? And if you could sit down with G20 leaders, what would you tell them?
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