Golden opportunity missed to reform banking sector: Yunus

Golden opportunity missed to reform banking sector: Yunus

Dhaka: Bangladesh’s “banker to the poor" says the world has missed a golden opportunity to help the neediest people on the planet with a redesign of the financial system in the wake of the global economic crisis.

Nobel laureate Muhammad Yunus, who along with his Grameen Bank won the peace prize in 2006, said leaving the world’s banking system in more or less the same state would not help the poor.

“This was the greatest opportunity we ever had to redesign the financial system globally and totally," the 69-year-old told AFP. “But now we’ve gone back to the same old ways and we’ll be ready for another crisis because we didn’t fix anything that is missing."

Yunus, who created a billion-dollar micro-credit venture by lending $27 to a group of village women in 1976, has been a vocal critic of the global banking system which he says deliberately excludes people.

He said a better, more inclusive global banking system was possible, one that lends money to poorest of the poor who lack collateral to secure credit.

“First we need to redesign the financial system to make it an inclusive system. Every person in the world will have easy access to this system. Grameen has proved that it can be done," he said. “Secondly we have to make sure (the banking sector) never has to come back for taxpayers’ bailouts for their mistakes."

Many of world’s leading banks faced collapse in late 2008 due to ill-judged investments in loss-making financial instruments, leading governments in the US and Europe to pump billions into the sector. Many of the same banks have since reported huge profits despite the government bailouts and critics are now wondering what has changed in the aftermath of the worst financial crisis since the 1930s.