New G20 proposals on financial consumer protection fail to learn lessons of financial crisis
13 Oct 2011
New G20 proposals on financial consumer protection fail
to learn lessons of financial crisis
The global consumer rights movement believes crucial omissions
in new G20 proposals on financial services will mean they do little
to improve protection for consumers from bank failures and will
fail to remove risky mortgages and poor credit services from the
Consumers International (CI), together with consumer
organisations in all G20 economies, today published an open
letter expressing dismay that the proposals being considered by
G20 finance ministers "still fall short of what is required" on
financial consumer protection. Finance ministers meet in Paris on
Friday to discuss the proposals.
The letter urges the G20 to "remember that weak consumer
protection in the form of irresponsible mortgage lending was both a
catalyst for this crisis, and is a long-standing concern of
'ordinary people' who use financial services every day."
The proposals, which were requested by the G20 following
concerted pressure from the world's consumer organisations, were
drawn up by the OECD. While CI and its members contributed
formally to the process, there is disappointment that key
demands were not included in the final submission.
As outlined in the open letter, the proposals "do not include
any explicit reference to deposit guarantees in the event of bank
failures, nor do they support the adoption of minimum standards for
financial products." CI believes these are crucial steps for
avoiding any future financial crises.
CI also calls for G20 leaders to support the establishment of a
new international organisation to champion financial consumer
protection in banking and the provision of credit. CI has proposed
that the organisation is based on an existing network of national
financial consumer protection agencies and has an independent
consumer panel to monitor, challenge and advice.
President of Consumers International, Jim Guest, will be
addressing finance ministers and central bank executives on Friday,
ahead of the G20 meeting.
On the omissions in the G20 recommendations Jim Guest said:
"These recommendations fail to grasp two of the most
important lessons from the financial crisis - regulators should
have done more to keep very poor and risky financial products off
the market, and that in periods of uncertainty, consumers need to
know that their deposits are backed by deposit guarantee
On the need to establish a new international organisation for
financial consumer protection, Jim Guest said;
"Given the importance of financial services to the stability
of the economy and the livelihoods of consumers, it is unacceptable
that we don't have an international organisation to support
consumer protection in banking and the provision of credit. G20
leaders should use this meeting to give their support to an
effective new international organisation that will champion the
protection of consumers of financial services."
Notes to Editors
 Consumers International (CI) is the only independent global
campaigning voice for consumers. With over 220 member organisations
in 115 countries, we are building a powerful international consumer
movement to help protect and empower consumers everywhere.
Consumers International is a not-for-profit company limited by
guarantee, registered in England and Wales (No. 4337865). CI is
also a registered UK charity (No.1122155).
Open letter to G20 finance ministers and G20 leaders
 In September 2010, CI working with consumer organisations in
all G20 countries launched the 'Consumers for Fair Financial
Services' campaign calling for the G20 to take urgent action to
support financial consumer protection.
Following the launch of campaign, the G20 leaders meeting in
Seoul requested the FSB to report on options to enhance protection
in consumer finance (credit), and the G20 finance ministers
requested the OECD to develop a set of 'high level principles on
financial consumer protection'. Both pieces of work will now be
presented to G20 finance ministers in Paris, 14-15 October and the
G20 leaders in November.
 CI's formal recommendations to the G20: Safe, fair and
competitive markets in financial services: recommendations for the
G20 on the enhancement of consumer protection in financial
comments powered by