In These New Times

A new paradigm for a post-imperial world

Berlin Chamber of Industry and Commerce Calls for Total Ban of Derivatives, Short Selling

Posted by seumasach on November 7, 2008


Nov. 6, 2008 (LPAC)–At a noon press conference today, Eric Schweitzer, president of the Berlin Chamber of Industry and Commerce (IHK Berlin), said that he has been forced by the dramatic Economic developments of the past few weeks to change a report he had previously delivered in September, since events have superseded its conclusions:

“The effects of the crisis on the real economy are immense, in the automobile sector and the export industries, and the downturn in construction which existed before the most recent developments, has been exacerbated. There is urgent need for state intervention, and especially for tighter regulation of the financial sphere; and that, regulation of speculative activity would not be enough, but that a total ban of these kinds of dealings, which are destructive from the standpoint of industrial firms, is necessary.” Schweitzer also called for completely banning short-selling, adding that controls over the banking sector need a real overhaul, apparently, because the existing supervisory and control instruments have not functioned.

In terms of making loans available to the Mittelstand and small firms–of which Berlin has many–the state should intervene through the Berlin Investment Bank, because the private banks are shutting down their loans to the smaller firms, and are even asking them to pay back or reduce their debt because of the “risks.” Schweitzer said that the IHK hopes things will not turn worse, but against their own experience of being skeptical last year when, after the IKB and SachsenLB banking disasters, politicians and bankers tried to give the impression that the worst was over, the IHK is not at all too confident that the present crisis is over, especially in respect to the real economy. Because of the profound crisis, the public sector should advance all infrastructure projects that are on the timetable for the next decade, in order to give an incentive to the construction sector now

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