Workers and unions' voices are needed to restore trust in the financial industry, experts say
Ten years after the largest economic failure in modern history, financial institutions are bigger, less safe, and more volatile than ever. Today, bank workers, corporate leaders, and diplomats held an urgent discussion on how bank workforces can be an active part of changing our financial institutions to avoid the catastrophic mistakes of the past. From being the executors of ethical and transparent policies, to restoring trust between customers and institutions, to regulating the industry from below, panelists in two consecutive events considered how bank workers are critical to steering society away from the worst consequences of financialization.
“Big banks were an accessory in 2008, which led to a meltdown in the global economy and the loss of tens of thousands of jobs in the financial sector,” said H.E. Mr. Christian Braun, Permanent Representative from Luxembourg to the UN. “Today, complacency is back, and financial regulation is being rolled back. There has been a return of strong risks to financial stability. Stakeholders must create a dialogue and work toward solutions – this includes unions representing workers. There is a need for a specific kind of social dialogue for this sector and special attention to whistleblowing.”
A top discussion point was lifting the voice of bank workers, especially in the United States, where standards for labor representation have fallen behind. Millions of bank workers, for instance, are organized into unions at some of the largest banks in the world, including UniCredit, Société Générale, and Deutsche Bank. Meanwhile, bank workers in the U.S. are still struggling for union representation.
“Opposition to unions is a voluntary condition, not a requirement of doing business in the United States. It’s time that European banks with substantial operations here, like Santander, learn this,” said Christy Hoffman, General Secretary of UNI Global Union. “In fact, the European banks doing business in the United States have a role in helping transform this industry to give workers a voice. They already have the long traditions of working with unions and they can help to lead the way and establish new practices in this country. These banks should not sink to the so-called ‘local practices’ of union avoidance. That is not the way to create a stable, sustainable financial system.”
Panelists explored how the positioning of bank workers at the frontlines of operations offers them the perspective and capacity to prevent and combat unethical and predatory practices that could once again threaten the global economy. The discussions also considered how that capacity can be bolstered by increasing the voice bank workers have in corporate governance and policy.
"Today, while governments from around the world try to convince financial firms to reverse course and finance sustainable development, we are here to say that the first step on that path is to respect the human rights of their employees, who make their profits possible. Santander treats its employees in Europe with dignity and respect, and its U.S. employees deserve the same treatment. As Rev. Martin Luther King Jr. once said, ‘injustice anywhere is a threat to justice everywhere,’” said Jerry Robinson with the Committee for Better Banks, who worked at Santander Consumer USA for six years.
The Friedrich-Ebert Stiftung-New York Office sponsored the event and opened the first session, which explored trade unions’ role in marshaling workers toward sustainable practices. Featuring frank discussions between thought leaders, diplomats, and union officials on how financial institutions can strengthen and maximize their relationships with employees, Luise Rurup, the Executive Director of the FES New York Office said, “the finance sector’s massive growth in size, power, and importance runs contrary to efforts to realize the Sustainable Development Goals, and it must be brought back into the service of the real economy. Workers, represented by Works Councils and trade unions, are important players in advocating for stronger and better regulation of the finance sector “from below”.
The follow up discussion launched the findings of two major reports on the topic -- “Tipping the Balance: Collective Action by Finance Workers Creates ‘Regulation from Below’” and “Reforming Bank Governance: “Top-Down” Reform and Bank Resistance -- that offer practical and simple solutions to improving banks employment practices. Panelists discussed how American bank workers’ bargaining power has been weakened, wages have stagnated, there have been sharp rises in income inequality, and there is more financial instability.