International Financial Regulatory Standards and Human Rights: Connecting the Dots
11 December 2017
UAntwerpen, Stadscampus, Room A.202 - Building A, Prinsstraat 13 - 2000 Antwerpen (route: UAntwerpen, Stadscampus
12:00 PM - 2:00 PM
Organization / co-organization:
Law & Development research group
Lunch seminar by Prof Danny Bradlow
The Law & Development Research Group is pleased to invite you to a lunch seminar on Monday December 11, 2017 between 12:00 and 14:00 hours featuring a presentation by Prof. Dr. Daniel D. Bradlow.
Professor Bradlow is the SARCHI Professor of International Development Law and African Economic Relations at the University of Pretoria, South Africa and Professor of Law Emeritus, American University Washington College of Law in Washington, D.C.
International Financial Regulatory Standards and Human Rights: Connecting the Dots- Motoko Aizawa, Daniel Bradlow and Margaret Wachenfeld
Historically, the financial sector provides support to the real economy, thereby contributing to the wealth, resilience, stability and the degree of inequality in a society. However, in recent years it has been performing sub-optimally. One reason is that those who are responsible for designing and implementing the financial sector’s regulatory frameworks are paying insufficient attention to understanding all their impacts thereby increasing the risk of significant unintended consequences and of financial institutions and their regulators incorrectly calculating the costs and benefits of their decisions and actions. This can be seen, for example, in the adverse impact that the Financial Action Task Force’s Recommendations have had on remittance flows, on the people sending them and to whom they were being sent.
This paper seeks to answer the following question; would a human rights analysis add value to the quality of the international financial regulatory standards. Its hypothesis is that the international standard setting bodies (SSBs), would improve the quality of their international standards if they incorporated a human rights analysis into their standard-making processes. In order to establish this hypothesis, it focuses on five SSBs and seven of their international standards and their relationship to human rights.
The paper begins by establishing the human rights responsibilities or obligations of the SSBs, their members and regulated entities. Thereafter, it considers how human rights issues arise in the financial sector value chain, in regard to the functions of finance and the international standards applicable to each function. The study shows:
- All seven standards raise issues relating to the right of non-discrimination, and the rights to information, privacy, and an effective remedy.
- All the standards raise issues relating to economic, social and cultural rights, although the precise rights implicated will vary across the standards.
- The standards raise three issues relating to the realization of human rights in general, as opposed to specific rights: the obligation for signatory states to allocate the “maximum available resources” to the progressive realization of economic, social and cultural rights, the human rights responsibilities of private actors exercising delegated regulatory authority, and the need for financial regulators and institutions to appropriately account for all the impacts and risks created by their decisions and actions.
- The failure of the SSBs to explicitly utilize such international standards as the United Nations Guiding Principles on Business and Human Rights, the Principles on Responsible Investing and the Equator Principles, even though many financial institutions have publicly expressed their support and adherence to them, exacerbates the SSBs failure to comprehensively address the risk factors facing the financial sector.
- The SSBs will incur both costs and benefits if they utilize a human rights analysis but the benefits will outweigh the costs.
- There are risks to human rights if the financial sector adopts a human rights approach but these risks can be managed.
Confirm your presence by e-mail to Gamze.ErdemTurkelli@uantwerpen.be before 4 December 2017
Contact email: Gamze.ErdemTurkelli@uantwerpen.be