Sozialalmanach - Caritas Luxembourg
Sozialalmanach - Caritas Luxembourg Sozialalmanach - Caritas Luxembourg
In short, governments are in principle seeking to establish a “level playing field” for all. The worry is real that national governments will ultimately fall back to no small degree on the protection of their own national interests and the search for competitive advantages of their own financial centers. It is usually recognized that banks and other financial services providers have supported and promoted much past economic growth that ultimately benefits all. Innovation, excellence and flexibility in adjusting to rapidly changing circumstances have all played critical roles in the financial system’s performance. There is now however real concern that the structural reforms of the financial system, involving ever heavier regulation and oversight, will stymie the financial sector’s dynamism and reduce its ability to provide appropriate funds and impetus to non-financial activities worldwide. In other words, the emerging financial system, straddled by increased regulation and oversight under the aegis of pronounced international cooperation, will cause further drag to worldwide economic recovery. The duties of banks and other financial services providers The financial system has so far operated on the basis of assuming its legal duty without concern for the unintended consequences of its actions. The notion of ethical duty and its underpinning principles of integrity have so far held no sway in financial behavior. In fact, governments, investors, civil society bodies and the media have had much to say about the lack of fairness, transparency, responsibility and accountability in the undertakings of the financial system. Fairness, transparency, responsibility and accountability are in effect the core principles of integrity. The global financial sector must restore trust if it is to fully contribute to overcoming the crisis. Imposing “proper” financial behavior through law and regulation does nothing to restore banking reputation and the standing of the banks and other financial services providers. On the contrary, such rules, regulation and oversight simply highlight and emphasize the perceived willingness of both banks and other financial services providers to pursue corporate and personal gain at the expense of investors and all those other stakeholders directly or indirectly affected, if not afflicted, by the goings on of the financial system. For trust and reputation to be restored, there is need for a profound change in financial behavior. Business practices can no longer be driven just by legal duties. It requires banks and other financial services providers to embrace ethical duties based fully on the principles of integrity. In other words, the financial sector must shift to a mode of operation that involves the pursuit of social responsibility as captured in the ESG (environmental, social and governance) principles and promoted in particular in sustainable and responsible investments. 213
Corporate financial governance, with its key functions of audit and internal control, compliance and risk management, is at the heart of the shift in financial behavior and business practices. To no small degree, it is a top-down change in behavior and practices, starting with the board of directors. It profoundly involves a shift in duty from the purely legal and fiduciary to one encompassing the ethical and its principles of integrity. Otherwise, banking will remain in disrepute and disrepair. It will be further smothered in more and more regulation and oversight. This state of affair can only lead to stymied innovation and the financial system contributing poorly in overcoming the crisis and much less to the pursuit of economic recovery and growth. And where does that leave the financial system’s contribution to overcome the crisis? It does not augur well. Banks must rebuild their own capital in order to be able to weather future shocks to the financial system. And there will be future shocks due to the inevitable bubbles in overpriced assets and the nature of the business cycle. In the pursuit of the alleviation of systemic risk that leads to profound economic crises, there will be profound government-induced structural reforms to deal with the matter of “too big to fail” and its related issue of moral hazard. The scope and extent of such reforms are so far unknown, as are those of the regulatory and oversight reforms contemplated. We only know for sure that the reforms will ultimately be extensive and will otherwise require overcoming government obstacles due to the unavoidable conflicts in national interests. All that leaves the financial system, comprised of its banks and other financial services providers, facing great uncertainty as to the new rules of the game and its ability to maintain its competitiveness. While investment bank operations can expect to continue to reap, when the opportunities present themselves, huge profits in specific specialized markets, we can otherwise expect at best caution and prudence to generally prevail throughout the financial system. In other words, the financial system will behave on the whole with risk-aversion and forego initiatives that could otherwise add impetus to overcoming the crisis. Yes, the financial system will contribute to overcoming the crisis. It cannot do otherwise in its role of financial intermediary. The issue is that credit provided will not be willingly brought forward. In effect, the financial system can be expected to play essentially a passive role, responding to business needs in short and long term capital only when its banks and other financial services providers are fully assured that they will recover the moneys made available to support economic recovery and growth. 214
- Page 163 and 164: has been more rapid, and the willin
- Page 165 and 166: capacities of the real economy. The
- Page 167 and 168: The above three features of loose m
- Page 169 and 170: eturned to the top of the political
- Page 171 and 172: despite its successes, the G20 has
- Page 173 and 174: ideological strife and polarising a
- Page 175 and 176: Eastern Europe, surely puts a break
- Page 177 and 178: Integrate migrants through particip
- Page 179 and 180: maintaining general financial stabi
- Page 181 and 182: social protection. What these obser
- Page 183 and 184: FERRARA, MAURIZIO & HEMERIJCK, ANTO
- Page 185 and 186: PIERSON, PAUL (1998): Irresistible
- Page 188 and 189: Croissance économique et cohésion
- Page 190 and 191: pas fixer le seuil de pauvreté à
- Page 192 and 193: Lien entre taux de pauvreté, reven
- Page 194 and 195: sur la croissance économique « qu
- Page 196 and 197: et donc le taux de pauvreté et ils
- Page 198 and 199: Conclusion générale Dans ce papie
- Page 200 and 201: Die Staatsfinanzen nach 2010 L U C
- Page 202 and 203: Dass da der Luxemburger Staat sich
- Page 204 and 205: abzuwälzen. Fraglich ist allerding
- Page 206 and 207: damit Einsparungen in Höhe von 8%
- Page 208 and 209: imstande sein wird, die gewohnte Ro
- Page 210 and 211: The financial system’s contributi
- Page 212 and 213: free-enterprise and private propert
- Page 216: At best, we can therefore hope for
- Page 219 and 220: Il coule de source que l’ampleur
- Page 221 and 222: B. Les causes de la pauvreté liée
- Page 223 and 224: mettre en place dans un avenir rapp
- Page 225 and 226: Il convient de saluer dans ce conte
- Page 227 and 228: constant que les personnes ne dispo
- Page 230 and 231: Crise en W ? M A R C O W A G E N E
- Page 232 and 233: Des inégalités et la perte du pou
- Page 234 and 235: Or, l’OCDE publia non seulement u
- Page 236 and 237: critiquée puisqu’elle accorde la
- Page 238 and 239: éfléchir plus de deux fois avant
- Page 240 and 241: cohésion sociale et au développem
- Page 242 and 243: zones témoins (où le RSA n’éta
- Page 244 and 245: Die Chance des Neuanfangs M I K E M
- Page 246 and 247: Dies ist nicht nur eine Katastrophe
- Page 248 and 249: Was bedeutet ein Wachstum von 4%? D
- Page 250 and 251: 2. Unseren ökologischen Fußabdruc
- Page 252 and 253: 3. Arbeit teilen Vollbeschäftigung
- Page 254 and 255: Friedensmissionen freikaufen, genau
- Page 256: wäre dementsprechend nicht gleichb
- Page 259 and 260: sometimes their homes. A spiral of
- Page 261 and 262: And economic resilience really does
- Page 263 and 264: Perhaps the most telling point of a
Corporate financial governance, with its key functions of audit and internal control,<br />
compliance and risk management, is at the heart of the shift in financial behavior and<br />
business practices. To no small degree, it is a top-down change in behavior and practices,<br />
starting with the board of directors. It profoundly involves a shift in duty from the purely<br />
legal and fiduciary to one encompassing the ethical and its principles of integrity.<br />
Otherwise, banking will remain in disrepute and disrepair. It will be further smothered<br />
in more and more regulation and oversight. This state of affair can only lead to stymied<br />
innovation and the financial system contributing poorly in overcoming the crisis and much<br />
less to the pursuit of economic recovery and growth.<br />
And where does that leave the financial system’s contribution<br />
to overcome the crisis?<br />
It does not augur well. Banks must rebuild their own capital in order to be able to<br />
weather future shocks to the financial system. And there will be future shocks due to the<br />
inevitable bubbles in overpriced assets and the nature of the business cycle.<br />
In the pursuit of the alleviation of systemic risk that leads to profound economic crises,<br />
there will be profound government-induced structural reforms to deal with the matter of<br />
“too big to fail” and its related issue of moral hazard. The scope and extent of such reforms<br />
are so far unknown, as are those of the regulatory and oversight reforms contemplated. We<br />
only know for sure that the reforms will ultimately be extensive and will otherwise require<br />
overcoming government obstacles due to the unavoidable conflicts in national interests.<br />
All that leaves the financial system, comprised of its banks and other financial services<br />
providers, facing great uncertainty as to the new rules of the game and its ability to maintain<br />
its competitiveness. While investment bank operations can expect to continue to reap, when<br />
the opportunities present themselves, huge profits in specific specialized markets, we can<br />
otherwise expect at best caution and prudence to generally prevail throughout the financial<br />
system. In other words, the financial system will behave on the whole with risk-aversion<br />
and forego initiatives that could otherwise add impetus to overcoming the crisis.<br />
Yes, the financial system will contribute to overcoming the crisis. It cannot do otherwise<br />
in its role of financial intermediary. The issue is that credit provided will not be willingly<br />
brought forward. In effect, the financial system can be expected to play essentially a passive<br />
role, responding to business needs in short and long term capital only when its banks and<br />
other financial services providers are fully assured that they will recover the moneys made<br />
available to support economic recovery and growth.<br />
214
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