On the BBC website today, the director-general of the WTO Pascal Lamy argues that "a little more prudential regulation" would have helped prevent the credit crunch. Although moderately stated, this puts him at odds with the neoliberal dogma of the Washington consensus and of New Labour: privatise, liberalise, deregulate.
To coincide with the Beyond the Market Economy conference, LEAP published Credit Crunch: Learning the Lessons - our analysis of what went wrong and what should be done.
In the document we look at the question of the regulation of the global finance sector. Prem Sikka states that "The timidity of financial regulators has encouraged banks and financial businesses to become casinos supreme. They take other people's monies and gamble them on virtually everything from oil, gas, commodities, food, interest rate and exchange rate movements, often without adequate public accountability", and argues that "to ensure that regulators (like the FSA) do not continue to be a cheerleader for major corporations, we need more openness. All correspondence between the FSA and any financial institution must be publicly available. Yet there is little sign of such changes in the FSA report".
In another paper, Gerry Gold quotes Mervyn Kings warning that the financial crisis had entered "a new and different phase", arguing that the current global finance system was "designed to bypass whatever system of regulation remained after the progressive dismantling of the post-war system following the 1971 collapse of Bretton Woods", and therefore that re-regulation cannot be the answer.
You can download the LEAP Red Papers - Credit Crunch: Learning the Lessons from the LRC website, and debate them here.