Just Reproduction, Production and Consumption

Regulation of the financial market

What's the problem?

The financial market, as part of the growth-driving economic structures, is also part of the problem. Even more than other areas, it evades democratic control. Without regulations, its mechanisms contribute unmitigated to destabilisation on the one hand and economic growth and climate change on the other.

What's the measure?

A drastic reduction, unbundling and stabilisation of the entire financial sector. In particular, purely speculative purposes and the accumulation of claims on assets to be generated only in the future must be curbed by strict regulations. As a matter of principle, the surplus private capital-seeking investment offers should be reduced by a redistribution policy based on solidarity.

How can the implementation look like?

  • Prohibition of credit default swaps, derivatives, securitisations, all off-balance sheet transactions and off-exchange trading, hedge funds, private equity funds and pure investment banking
  • Closure of tax havens and shadow financial centres
  • Separation of commercial and investment banks (separate banking system)
  • Unbundling and downsizing of "too big to fail" banks
  • Introduction of a Financial Transaction Tax
  • Establishment of a democratically controlled supervisory authority that examines all financial products to determine whether they are socially and environmentally sound or dangerous
  • Democratically controlled rating agencies that include social and environmental risks in their assessments
  • Setting a higher capital ratio for banks
  • Introduction of a minimum holding period for shares and other financial products
  • Increasing the transparency and accountability of the European Central Bank (ECB) to parliaments
  • Democratically controlled, federal, public banking institutions operating locally, regionally or nationally
  • Special funds that co-organise socio-ecological restructuring in specific sectors
  • Tax-funded investment programmes that channel revenue in a socio-ecological way
  • Economic democratic procedures such as regional investment councils, which control the needs-based distribution of the surpluses to be invested

How can climate change be counteracted and how can economic conditions be created that support effective climate protection measures?

This measure disarms the growth driver "financial market" and thus provides the overarching economic framework, that no longer stands in the way of an effective climate policy.

References to other measures

This measure goes hand in hand with all other measures

Further literature and sources