Sir, The correspondence between Sir Stephen Wright and John Cooke (22 July), Kavaljit Singh (July 29, 6 August) and Roger Brown (5 August) misses an important point, which is also lacking in the current discussions about the reform of the financial system after the subprime crisis emerged. The WTO negotiations to open up markets in financial services are mostly about deregulation, which are incorporated in the rules of the WTO services agreement (GATS) and the negotiation requests for liberalisation. For instance, GATS Art. XVI note 8 demands that countries that allow the establishment of a (financial) service sector can no longer limit capital inflows related to that (financial) service. An insight in the EU requests, which are clearly based on demands from the financial industry (1), during the GATS negotiations shows that the EU wants many national prudential regulations to be eliminated (e.g. eliminate regulations that limit the operations of hedge funds), some of which are now proposed in the financial reforms (e.g. to hold better capital reserves). The sub-prime crisis made many recognize that the self-healing power of the financial markets -in which the financial services industry plays an important role- is not working and that new financial regulations need to be in place. As long as such reforms are not in place, it would be inappropriate to allow the financial industry to spread their risky products and risky behaviour, which were very much encouraged by international competition that is promoted by WTO/GATS liberalisation. The current proposals to reform the financial system do not take into account the need for better access by the poor, farmers (to fight the food crisis) and SMEs. The lack of access is more and more recognized amongst others in studies by the World Bank, IMF and UNCTAD. The UN Department of Economic and Social Affairs and the UN Capital Fund even have a special programme on inclusive Finance (2) to find solutions beyond micro-finance and to improve access by the poor to regular banking. The subprime crisis shows that even if the banks serve the poor, in casu poor American households, they do not always do so responsibly. In addition, the discussions and instruments to improve lending and investment that promote environmentally friendly production, trade and consumption, are still far from sufficient to match the challenge from climate change and environmental degradation. So, even the current reform proposals on the financial system need further discussion. The lack of coordination at international level between liberalisation on the one hand and reforms/regulation at the other, is a key problem in the financial sector that needs to be tackled before the WTO can push forward with liberalisation of financial services.(3) Myriam Vander Stichele Senior Researcher, SOMO (Center for Research on Multinational Corporations) Notes (1) Some EU requests (negotiation documents) mention "EU industry raises this issue" (2) see for instance: Building Inclusive Financial Sectors for Development (3) See article by M. Vander Stichele on these issues "Ignoring the Crises? How Further GATS Liberalisation Impacts the Financial and Food Crises", in South Bulletin: Reflections and Foresights (Issue 16, 01 June 2008), p. 7