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Wednesday, Sep 17, 2008
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CPI(M): learn lessons from U.S. financial crisis

Special Correspondent

NEW DELHI: The Communist Party of India (Marxist) on Tuesday asked the Manmohan Singh government to learn “proper lessons” from the financial crisis afflicting the United States and asked it to withdraw steps to further deregulate the financial sector in the country.

Referring to the bankruptcy of Lehman Brothers, the fourth largest investment bank in the U.S., it said the development marks a deepening financial crisis precipitated by the collapse of the real estate bubble.

In a statement, the party Polit Bureau said the latest round of financial stress in the U.S. comes in spite of the recent nationalisation of the housing mortgage companies, Fannie Mae and Freddie Mac, and the state-sponsored bailout of another investment bank, Bear Stearns, earlier this year.

It is clear by now that even the U.S. government, with all its resources, is finding it impossible to bail out these financial giants with public funds, given the sheer size of their losses. The deregulated financial system of the U.S., which has been held up by the advocates of globalisation and financial liberalisation as a model to be emulated by all countries, has been badly exposed for its inefficiency and unviability.

“The Manmohan Singh government needs to learn the proper lessons from these momentous events. It has been pursuing harmful steps for financial liberalisation,” the statement said.

It said the Banking Regulation Amendment Bill, the Insurance Regulatory Authority Development Agency Bill, and the Provident Fund Regulatory Development Authority Bill, which seek to further deregulate, privatise and open up the banking, insurance and pension funds to foreign finance capital, should be withdrawn immediately.

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