Monday, March 30, 2009

It's time to shake up the financial system

I know, I know whenever the man opens his mouth you will read about it here. But, I largely agree with Muhammad Yunus, and we are currently reading his latest book "Creating a World Without Poverty"

So here are the latest thoughts from Yunus from the Bangladeshi paper the Daily Star, the Nobel laureate spoke at a conference about women.

Asked if the financial downturn has not exposed the fragility of the conventional banking system, Yunus said: “The crisis is not going to disappear. If anything, it is going to intensify.”

The crisis originated in one country due to a few individuals and engulfed the entire world.

"This shows the fragile structure of a country," he said.

“We cannot continue with the same framework of financial institutions which insist on collateral for giving credit. They have to be redesigned as two thirds of the world does not accept the present system," Yunus said.

"We have to create a new financial structure.”

The new financial system, he suggested, should be more inclusive.

Microcredit should not be relegated as a footnote but integrated into the main system, said the Nobel laureate, whose Grameen Bank has pulled millions out of poverty in Bangladesh.

Yunus said the financial meltdown offered a “great great opportunity to shake out old ideas about banking and bring in new ideas and a new system”.

“We cannot go back to the old system. We will have to go to a new system and come up with new ideas about banking," Yunus said.

He suggested the right to credit should be made a law like the right to food, education and health.

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