A/HRC/31/60 54. Second, according to most studies, financial crises and the subsequent policy measures commonly implemented to alleviate their consequences, for example, fiscal retrenchment and stabilization policies, enhance inequalities, with devastating social consequences. A debt crisis may have a massive depressive impact on output, which may in turn affect the level of inequality. Most studies also concur that financial crises result in an increase in income inequality. Fiscal consolidation following a sovereign debt overhang may also have strong distributional consequences, both directly and indirectly, for example, through the increase in the unemployment rate and social spending cuts. The social effects of crises, hitting in particular the most vulnerable, are often catastrophic, with widespread poverty, the emergence of health issues, rising unemployment, to name only a few common problems. 55. The report has traced the numerous social and human rights dimensions of inequality and outlined corresponding human rights obligations of States. The finding that inequality may contribute to the occurrence of financial crises, which in turn exacerbate inequality and adversely affect human rights, has far reaching policy and legal implications. It underscores that human rights, social and economic aspects are inseparably intertwined, calling for a holistic approach to preventing and confronting financial crises. The report suggests that financial crises may not be prevented without addressing the contributing human rights shortcomings, including those connected to inequality. The same is true for crisis-response measures: any reaction to financial crises that neglects the effects on human rights and inequality does not only run afoul of human rights duties and responsibilities but also risks creating the same problems again and again, preventing any economically sustainable future. This lends additional urgency to the international community’s commitment to reducing inequality reflected in Goal 10 of the Sustainable Development Goals. B. Recommendations 56. Preventing and responding to financial crises and combating inequalities must thus go hand in hand. Hence, policymakers must ensure that they tackle dangerous destabilizing developments in the financial sphere while addressing inequality directly. 1. Financial markets regulation 57. States and the international community should urgently implement financial market reforms in order to combat and prevent financial instability, excessive debt and financial crises. The current prerogatives of largely unregulated global financial markets lead to instability both within many countries and on international markets, making financial crises much more likely. They undermine accountability and endanger democratic representation. Policymakers should use a mix of tools to ensure appropriate global and domestic financial market regulation with the aim of curbing excessive credit growth. This mix should include measures of prudential regulation, debt sustainability analysis and capital controls. In order to better fulfil its guiding function for policymaking, debt sustainability analyses should incorporate inequality as a crucial factor, making sure that the debtor States are able to achieve the Sustainable Development Goals and their human rights obligations. 2. Labour policies 58. Labour market institutions provide for powerful instruments for improving pre-tax income equality and should widely be employed. States should not shy away from robust wage legislation, including introducing or raising minimum wages and 18