Money

Money

Monday, January 9, 2012

Welcome to Safe and Fair Finance Blog

Each year, an estimated 150 million new consumers join the global economy. For most, using formal financial services is a new activity for themselves, their family members and their immediate circle of friends.

In the developing world, most will find the experience frightening. Some will also find it hazardous to their health. A loan of $100 can become an insufferable debt of $1,000. At the same time, $100 in savings can be lost in fees and charges, or simply lost in the bank’s computer system. A deposit of $10,000 may become an invitation for a visit from the local mafia. Mandatory motor liability insurance may be just another excuse for a tax or a bribe. Private pension funds are no more than a fantasy.

Even in industrialized economies, the fine print of legal documents can confuse all but professional lawyers and accountants. Particularly in low-income communities but also in the affluent neighborhoods, the attraction of low interest rates has led many to ignore the risks involved in mortgages that would re-price at full market rates or convert from foreign to local currency at the whim of the lender. With one in five subprime loans causing borrowers to lose their homes in the US, no community can consider itself immune from the risks of weak consumer protection and financial literacy.

The objective of this blog is to help policy-makers worldwide find solutions that both benefit financial consumers and strengthen financial institutions. The solutions involve all stakeholders—not just government authorities, but also financial industry associations, consumer organizations, academic institutions and the media. The approach is to take the lessons from the world’s best research and look for ways to applying it in each country. It means also contributing to the global dialogue on financial regulation and building a network of like-minded professionals.

The objective is summarized just seven words … safe and fair financial services for all.
Pin It Now! submit to reddit

No comments:

Post a Comment