This proposal reframes financial regulation as an active instrument for reorienting private for-profit finance toward socially useful and ecologically sustainable ends, rather than a narrow toolkit confined to competition, consumer protection, and crisis prevention. It rests on five interlocking design features: (i) reasserting the shaping role of regulation, reviving credit guidance, capital controls, and related tools — including the separation of retail and investment banking and restrictions on proprietary trading, financial transaction (“Tobin”) taxes to curb speculation, and regulation of shadow banking; (ii) making purpose-driven institutions the norm, through fair banking regulations, public capitalisation of cooperative, mutual, and ethical finance, networks of regional mutual banks, and an enlarged public banking ecosystem; (iii) redirecting finance toward a just, sustainable economy, via statutory environmental mandates for central banks and regulators, a “one-for-one” capital rule on fossil fuel exposures, and cheap or zero-interest green funding lines as part of a coordinated credit-guidance strategy; (iv) strengthening transparency and democratic accountability, through non-industry supervisory boards, participatory panels, tight lobbying controls, revolving-door cooling-off periods, and robust whistleblower protection; and (v) addressing the global footprint of domestic financial regulation through public country-by-country reporting, beneficial-ownership registers, reform of company registries, asset-recovery enforcement, unitary taxation of multinationals. These initiatives could be supported by a UN Framework Convention on Tax Cooperation. Together, these measures move the financial system from a shareholder-driven extractive regime to a regulated, purpose-oriented infrastructure aligned with poverty eradication beyond growth.
