19 September 2018
The fall of Lehman Brothers on 15 September 2008, precipitated the global financial crisis that had been looming with the “credit crunch” and the disintegration of the US subprime housing market since spring 2007.
On 18 September 2008 – 10 years to this day, the TUAC released “Bailing out financial capitalism: what governments must demand in return“, one of the first international trade union reaction.
You can download the full statement on the left-hand side.
“If it were not for the impact on the real economy and on working families, there would be irony in witnessing the past two decades of frantic financial de-regulation reforms that swept throughout the OECD ending with the largest nationalisation programme in modern history of the financial sector. (…) Financial authorities are not equipped with the needed regulatory tools to handle this crisis. The emergency action to support financial institutions that are too big to be allowed to go bankrupt is necessary. But it is unacceptable that governments nationalise the losses of financial capital and privatise the profits. The quid pro quo must be properly regulated financial institutions. International cooperation should go far beyond what is currently under consideration – ie. reviewing prudential rules for banks and “encouraging” more transparency on the market place. It is the national and global regulatory architecture that needs to be restored so that financial markets return to their primary function: to ensure stable and cost-effective financing of the real economy”.
The TUAC statement was soon to be followed by many others: UNI Global Union’s “Financial crisis: the price tag on intervention” (21 Sep.), the AFL-CIO’s “No Blank Check on Bailout!” (22 Sep.), the ETUC’s “London Declaration: a call for fairness and tough action” (27 Sep.), the ITUC’s “The time has come” (1 Oct.).
Beyond the OECD and national governments, the labour movement also called upon the G7 Finance to take quick and decisive action, including in an open letter of the ITUC, ETUC & TUAC .
For the first G20 Summit at Heads of State level on 15 November, then labelled “G20 Crisis Summit”, the Global Unions released the “Washington Declaration” followed by a TUAC position paper “Re-regulation in the Aftermath of the Global Financial Crisis” (2 Dec).
The 2008 financial crisis was terribly damaging for the people at that time. Ten years after, we are still living with the consequences of letting financial systems and leveraging growth with weak oversights: a fragile recovery that primarily relies on monetary easing and fiscal stimulus, not on wages and long term investments, a recovery that remains under threat of new financial risks with an overblown shadow banking system, and that delivers employment levels in numbers, not in quality jobs.
The fall out of the global financial crisis and lessons learned will be discussed at upcoming TUAC meetings in November and December 2018.