Workshop to Corporate Accountability in the Financial Services organised by WEED on 13th/14th June 2006 in Cologne/Germany Liberalisation of financial services and the effect for developing countries were the main issues of the workshop with experts from Brazil, India, the Netherlands, Great Britain and Germany from NGOs, Worker Unions, independent institutes and the German Supervisory Authority BaFin. Especially countries like India are very interesting for the financial market. Therefore the industrialised countries want to liberalise the market and the GATS agreement on financial services is the main framework for it. In this context the function and the possibilities of Code of Conducts and the meaning of Corporate Social Responsibility (CSR) for multinational enterprises like Citigroup, HSBC and Deutsche Bank were discussed. Achim Tiffe from the institute for financial services gave an overview about the legal framework and the possibilities of Code of Conducts. Even penalties and strict obligations are not very common as a part of code of conducts it is possible to integrate strict obligations and penalties. But the most important seems to be to get more information from the enterprises about their activities for their own Corporate Social Responsibility (CSR). The institute for financial services sees product development for low income groups and community reinvestment as a main part of the social responsibility of the financial sector. The financial sector should be integrated to accomplish the basic needs especially of the lower income groups and small enterprises. The problem is not the takeover of the national banking sector by other banks situated in the industrialised countries but in the absence of law to protect the consumers and small enterprises and to guarantee the supply with useful financial products for these groups. Kavaljit Singh from the Public Interest Research Centre in Delhi gave a good example to avoid red-lining and undersupply of rural areas with financial services in India. For each new branch in an urban region banks had to open four branches in rural areas. Even about 500 Mio. Indians do still not have a bank account it helped to build up financial services in rural areas. Today the amount of rural credits declines and India has actually a huge number of under-banked districts and strict guidelines to ensure financial services for rural areas do not exist at the moment. On the other hand micro-credit programs can only “compliment, not substitute the growing needs of farmers, rural entrepreneurs, small enterprises and informal sectors of economy”, so Kavaljit Singh. Therefore the institute for financial services argue for solutions that should be found inside the existing financial sector with affordable products for the basic needs of the population. Responsible lending, a sufficient infrastructure and new affordable products for lower income households are part of it. ID: 37602 Author(s): Achim Tiffe Publication date: 16/06/06     URL(s): More information about the workshop

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Created: 16/06/06. Last changed: 19/06/06.
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