http://www.neweconomics.org/fairlending
25/11/2009
Doorstep Robbery
Why the UK needs a fair lending law
The very poorest people in the UK are paying thousands of pounds to legal loans sharks who charge them over the odds for sommething that most of us can easily access at the bank: credit. This report calls for immediate Government action to curb high-cost predatory lending.
Nine million people in the UK don’t have access to credit from banks, so have no choice but to use rip-off lenders: The cost of a loan of £100 with a company such as Provident Financial can be £49.50 – nearly 50 per cent of the amount borrowed, or an APR of 545.2 per cent. A loan from a payday lender costs even more; to borrow £100, lenders charge £25 for one month – an annual percentage rate of nearly 1300 per cent. These lenders charge whatever they want – the sky is the limit.
So far the Government has failed to implement proper legislation that would stop these predatory lenders. This report recommends several actions that policymakers could implement now to tackle the problem, such as introducing a UK version of the Community Reinvestment Act seen in the USA, a cap on the total cost of credit, the abolition of credit dependency and an investigation into the impacts of interest rate caps on poor households.
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Other recent ECRC partner NEF reports from their website:
http://www.neweconomics.org/programmes/business-finance-and-economics
12/11/2009
The Ecology of Finance
An alternative white paper on banking and financial sector reform
The financial system needs to start working like a productive ecosystem. It should be characterised by diversity and an ability to sustain specialised and adapted life in the face of external shocks. Instead of a monoculture of mega-banks deemed too big to fail and answerable only to the demands of private shareholders, an ecology of finance would involve a range of different financial institutions.
Only radical reform of the UK banking and financial sector can deliver institutions capable of investment and lending that is economically and socially productive. Rather than seeking a technical fix for our sick financial sector Government should be having a philosophical rethink. A return to business-as-usual would prevent the Government’s own stated ambitions of a more competitive and diverse sector from being realised.
The Ecology of Finance calls for recasting the entire banking and financial sector according to what the proper function of finance should be. No longer wedded to short-term and profit-driven models of lending and to risky, volatile speculative investment, the banking sector would, instead, form a highly diverse ‘ecology’ of institutions that range in structure, market sector and scale; adapted to the complexity and shared long-term goals of the economy.
To realise the vision of a stable and productive financial system, which we have termed the ecology of finance, then preventative reforms to rein in the excesses of the financial system must be combined with positive measures to harness the potential of both mainstream and alternative financial institutions.
Recommendations include calls for green investment banking, post office banking, the growth of credit unions, co-operatives and mutuals, community land trusts and social investment banking. The report also calls for new legislation to bring transparency to the financial sector and to link large commercial banking with community finance via a UK version of the Community Re-investment Act.
Publication available here 1.63MB pdf
30/11/2009
Other Worlds are Possible
Human progress in an age of climate change
This sixth report from the Working Group on Climate Change and Development argues that our chances of triumphing over climate change will rise dramatically if we recognise that there we need not one but many models of human development.
Featuring contributions from Dr Rajendra Pachauri (Chairman of the Nobel Peace Prize-winning Intergovernmental Panel on Climate Change), Professor Herman Daly (Leading environmental economist and winner of Right Livelihood Award), Professor Wangari Maathai (Nobel Peace Prize winner), Professor Manfred Max-Neef (environmental economist and winner of the Right Livelihood Award), Professor Jayati Ghosh (economist) and David Woodward (nef fellow).
Building on the findings of previous Up in Smoke? reports, Other Worlds are Possible calls for new economic approaches to international development which are more in tune with the needs of people and the planet.
The report describes how the costs and benefits of global economic growth have been very unfairly distributed, with those on lowest incomes getting the fewest benefits and paying the highest costs. A wide range of examples of more positive approaches are given from the wide, practical experience of the agencies in the coalition. Altogether they paint a picture of more qualitative development that is not dependent on further global over-consumption by the already rich, in the hope that crumbs of poverty alleviation are perhaps passed to those at the bottom of the income pile.
Other Worlds are Possible notes that difference between success and failure in the international climate negotiations will be whether governments and financial institutions continue to support old, failed economic approaches, with their policy frameworks and our financial resources, or whether they will move to encourage and replicate new approaches that take account of our changed economic and environmental circumstances. This timely report makes the case in compelling terms that there is not one model of economic development; there are many.
Publication available here 2.26MB pdf |
