A vote in the European parliament today failed to remove loopholes in new regulation to prevent banks driving up food prices through financial speculation.
MEPs voted in favour of limits to speculation, but allowed loopholes to remain which risk rendering the new rules ineffective.
Campaigners in the UK sent more than 14,000 messages to their MEPs this week, asking them to stop food speculation by banks and hedge funds pushing food prices beyond the reach of millions of the world’s poorest people.
World Development Movement campaigner Christine Haigh said:
Watertight regulation is essential if we are to stop excessive speculation fuelling devastating food price spikes. If it remains in its current form, the controls will be too weak to properly tackle speculation. Now it’s down to George Osborne and his fellow finance ministers to back strict rules.
George Osborne and other European finance ministers are due to vote on the proposed regulation on 13 November.
If the amendments to remove the loopholes had been passed, they would have:
- Ensured that the limits apply to all commodity contracts, for their full duration, and including any contracts that cannot be traded on exchanges;
- Enabled limits to be applied to groups of traders (for example financial speculators) as well as individual traders;
- Clarified the function of the limits;
- Ensured that regulators receive information to oversee the markets on a regular basis.