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Press Releases & Updates

18 FEB 2013

Key Eurozone banks step back from food speculation

Banks in France, Germany, Austria and the United Kingdom have pulled back from speculative trading in agricultural commodities, a controversial practice that Oxfam opposes because it is associated with food price volatility.

In response to a campaign by Oxfam France, “Banks: Profiting from Hunger”, on 14 February, BNP Paribas suspended a US$214 million agricultural fund and closed another fund that was partially indexed to agricultural commodities. Crédit Agricole meanwhile closed three funds that allowed clients to speculate on agricultural commodities. Oxfam France welcomes the moves by BNP Paribas and Crédit Agricole.

In the UK, Barclays Bank announced on 12 February that it will stop speculating on food commodities. Oxfam welcomes this shift of policy, although it remains to be seen whether Barclays will stop selling speculative investment products to other investors as well as making its own bets.

Following a similar campaign by Oxfam Germany last year, Deka-Bank, Landesbank Berlin, Landesbank Baden Württemberg, Commerzbank and Austria’s Österreichische Volksbanken AG all reduced their involvement with agricultural commodity funds. The two largest German commodity traders, Allianz and Deutsche Bank, have refused to change their policy on commodity speculation because they deny it has an impact on real food prices even though the relationship between the two is now widely accepted by a growing number of traders and researchers.

Oxfam Belgium is also participating in a national campaign demanding Belgian banks to stop selling speculative investment products. In May, the campaign will publish new figures on these products.

Oxfam and other campaigning organisations, together with many economists and development experts, are concerned that financial speculation on agricultural commodities can make food prices more volatile, which can ultimately hurt poor consumers and farmers. Investments in often excessive and secretive financial products jumped globally from US$10 billion in 2004 to US$90 billion in 2011.

The lead of French, German, Austrian and UK banks in turning away from speculation on food prices should add weight to calls for stronger regulation and greater transparency of financial instruments that deal in commodities. Oxfam has been lobbying for this at the European Union, as well as the US and G20. The European Parliament has already voted in favour of introducing mandatory limits on speculation on commodity derivatives and Oxfam is calling on the European Council to follow suit.

Oxfam Novib in the Netherlands is also part of the ‘Fair Bank Guide’ coalition which each year reviews the social and sustainability policies of Dutch banks, another Oxfam effort aimed at increasing banking transparency.

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About Oxfam
Oxfam is dedicated to fighting poverty and inequity worldwide. The international and independent development and humanitarian organisation tackles poverty in four main ways: sustainable development in poor communities, disaster relief, local and global advocacy, and education with Hong Kong youth. Established in Hong Kong in 1976, Oxfam Hong Kong is a founding member of Oxfam, an international confederation that has assisted poor people in 94 countries. Oxfam Hong Kong alone has supported poor people in over 70 countries/regions.