Proposals for G20 financial services reform fail consumers
10 Aug 2011
New proposals to be put to the G20 for improving
financial consumer protection do not go far enough, Consumers
The draft international principles on financial
consumer protection, drawn up by the Organisation for
Economic Cooperation and Development (OECD) and now out for
public consultation, were requested by G20 finance ministers.
This follows Consumers International's call to the G20 for
international action to enhance consumer protection in financial
services as part of the
Consumers for Fair Financial Services campaign.
However, the current draft principles raise serious concerns for
the consumer movement:
- Overall the draft does not demonstrate the commitment needed to
address consumers' concerns about financial consumer protection.
Too often the principles are undermined by language such as
'voluntary', 'non binding' and 'as appropriate.'
- CI is very concerned that the draft does not recommend that
consumers' assets such as bank deposits should be guaranteed.
Deposit guarantee schemes are a protection for all actors, not only
consumers. Systemic stability is also protected by such guarantees,
which dissuade consumers from making panic withdrawals from their
- There should be a clear reference to the right of regulatory
authorities to require that products have to conform to certain
standards in order to be released onto the market, or to continue
to be marketed.
- Finally, CI urges governments to support the development of an
international organisation for promoting financial consumer
protection. The existing international network of financial
consumer protection organisations, FinCoNet, should be given the
political support and resources to play a more effective role at
the global level.
As part of the public consultation
CI member organisations around the world are writing to their
finance ministers and directly to the OECD with this response, as
well as submitting examples from their own country of the
consequences of failures in financial consumer protection.
Members of the public can also comment directly on the
proposals. Details of how to do this can be found on the OECD's public consultation page.
Find CI's summary response below, and, together with other
position papers, on the Resources page in the
Consumers For Fair Financial Services section.
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