Another 'worst': Faulty bank regulation

Another 'worst': Faulty bank regulation 

The Dec. 20 Outlook compilation of the decade’s worst ideas did not include the one most to blame for the loss of most of the past decade’s growth: regulations that allowed banks to hold absolute minimums of capital as long as they lent to clients or invested in instruments rated AAA, for having no risk. This launched a frantic race to find AAA-rated investments wherever and finally took the markets over the cliff of the subprime mortgages. 

The most horrific part is that it seems likely to endure because regulators can’t seem to let go of this utterly faulty regulatory paradigm. Let me remind you that banks are allowed to hold zero capital when lending to sovereign countries rated AAA and that there are already many reasons to think that the credit quality of many sovereign states has been more than a bit overrated.

https://subprimeregulations.blogspot.com/2010/05/letter-in-washington-post.html

Do developing countries have a real voice in the developed Civil Society Community?

As a former Executive Director of the World Bank (2002-2004) and who since my term ended have been in very close contact with many ONGs or Civil Society Organizations, and have even acted as part of the Civil Society, I must say I am not so sure of how to answer the question made in the title... of course making the caveat that neither am I so sure about what Civil Society really means.

As a citizen I have seen many extremely good NGOs that I have nothing to complain about and much to thank for, but, then again I have also seen some multinational ONG corporations that arrogantly want to impose their agendas and their world views on us… and that we should not let them! No ONG, much less an international, should ever be able to completely substitute for the voice of an individual citizen.

For instance on a somewhat personal note, I am an oil-cursed citizen, I have seen some ONGs taking the side of governments defending their right to manage the oil-revenues on behalf of the (incapable) citizens, and even recommending that this be done through a tripartite arrangement between governments, oil-companies and civil society, presumably their civil society. This is totally unacceptable for a citizen that has seen immense non renewable oil richness being wasted forever and good governance made impossible by the extreme powers vested into any government which receives the oil income.

In other cases I have seen small local NGOs while trying to find real life solutions to their urgent day to day problems, like for instance those derived from bad public services resulting from badly executed privatizations, seeing their agendas completely and unduly taken over for the internationally seemingly more “interesting” quest of “getting back at those bastard multinational corporations”.

I had the opportunity of participating in many debates on the voice and governance issues at the World Bank, and I do think the bank is well served of reaching out very often to the civil society in search of the-other-side-of-the-story but, in doing so, it should first always make clear that in the final count it works for governments, so as not to create false expectations, and secondly to always be really sure of what civil society is represented by which civil society and that each civil society is duly connected to a real life citizen.