Forum 2015 | Worldconnectors

Different projects of NCDO converge on this forum to exchange ideas and opinions about international cooperation. You are welcome to join all our discussions. Welcome Worldconnection! Please log in to start topics and post reactions in this forum. You can log in using your worldconnections account.

		Worldconnection   Anne-Katrien Denissen 5 posts View profile 22 December 2009  15:20    Quote How to link the financial sector to the ecological system? The Worldconnectors are formulating a statement on Financial Systems. However, there are still some questions that need to be answered. Please give your input on the following question: "Reforms within the financial sector require a critical assessment of the extent to which innovative instruments can be used to increase the leverage of private capital. The outcomes of such an assessment will depend on whether or not the bigger picture is taken into account, i.e., the interconnectedness between the financial and the ecological system. From this perspective, the continuation of the current financial system, which is built on the assumption of continuous growth, is likely to deepen the ecological crisis, by progressively exceeding the earth’s carrying capacity. This may mean that any attempt to restore the old system will fail in the end. In the recent past, financial institutions had incentives to create innovative financial instruments which offloaded risks and responsibilities, with perverse consequences. The current challenge is to create incentives for the same sector to develop financial instruments to accelerate the greening of the economy and to reduce the pressure on the ecological system. For example, financing can be explicitly directed towards activities that lower the ecological footprint. Also, behavioural codes in the sector could call on financial institutions, like pension funds, to invest a minimum percentage of their portfolio in nature conservation. But, what role is there for the government to facilitate (or even enforce) such developments, and what are the responsibilities within the sector itself?"

		VoiceOver 2015 member   Thomas Baganineza Swaziland 33 posts View profile 23 December 2009  11:25    Quote Re: How to link the financial sector to the ecological system? Hello Anne-Katrien! I think it is obvious that the financial system is already linked to the ecological system in the sense that the more the ecological footprint increases the more much money is needed to meet many consumption needs of 6,7 billion people who live on planet earth. I disagree with the view that there will be an ecological crisis, I do not think that with the current growth population rate, the earth carrying capacity will be exceeded. There is so much money running in the system that we have to pray against inflation. More over the nature of ecosystems has an equilibrium that in spite of our limited knowledge and failure to maintain the environment,the ecological footprint cannot tilt to the abyss. While the greening of the economy and nature conservation should be encouraged and supported to some extend, I don't think the most pressing issue now should be trying to reduce the pressure on ecological system. Why? Because everything, financial systems and people included should grow upwards in increasing order, from bottom to the top. The argument that population should be reduced and controlled in order for everyone to have enough money and other kinds of provision is not totally convincing. The world is neither broke financially nor poor in natural resources, it is only mismanaged. In other words, the current ecological indicators shouldn't be a cause of concern for financial systems. The real big problem with international banking systems is corruption that has made world financial systems to look like gambling clubs sunk in shadow banking and crazy derivatives. The current global recession, the fall of Wall Street last year and the recent financial crisis in Dubai are the real warning signs that before anything else bankers, financiers, economists and financial policy makers should adopt strong morals, applied ethics, transparency and integrity. I do not think it would be easy for any Individual Government to come up with sweeping financial-ecological policies or reforms unless they are fully supported or initiated by IMF and WORLD BANK. The good news however is that the whole world has gone green! Let us pray that there be also green ethics,morals, transparency and integrity! Merry Christmas and Happy New Year! thomasbaganineza@gmail.com

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