27 February 2016

G20 Finance Communiqué

1. [...]Downside risks and vulnerabilities have risen, against the backdrop of volatile capital flows, a large drop of commodity prices, escalated geopolitical tensions, the shock of a potential UK exit from the European Union and a large and increasing number of refugees in some regions. Additionally, there are growing concerns about the risk of further downward revision in global economic prospects. [...]The G20 expects activity to continue to expand at a moderate pace in most advanced economies, and growth in key emerging market economies remains strong. [...]
    
2. [...]Monetary policies will continue to support economic activity and ensure price stability, consistent with central banks' mandates, but monetary policy alone cannot lead to balanced growth. The G20's fiscal strategies aim to support the economy and it will use fiscal policy flexibly to strengthen growth, job creation and confidence, while enhancing resilience and ensuring debt as a share of GDP is on a sustainable path. [...] The G20 reiterates that excess volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability. [...]
    
3. [...] The G20 will prioritise and put special emphasis in 2016 on the implementation of our adjusted national Growth Strategies with a view to achieving the objective of 2 percent additional output by 2018. [...]
    
4. [...] The G20 supports the development of a guidance note on recommended policy steps that could contribute to diversified financing instruments for infrastructure and SMEs with special attention to equity financing by promoting capital markets development, engaging institutional investors, encouraging implementation of G20/OECD corporate governance and SME financing principles and promoting infrastructure investments as an asset class.
    
5. [...] The G20 endorsed the work program of the International Financial Architecture Working Group (IFAWG) aimed at promoting a smooth functioning and orderly evolution of the international monetary system (IMS), informed by the IMF's stocktaking of the IMS. [...] 
    
6. The G20 remains committed to timely, full and consistent implementation of the agreed financial reforms, including the Basel III and total-loss-absorbing-capacity (TLAC) standard. To this end, it encourages national authorities to strengthen cross-border cooperation, including in implementing effective cross-border resolution regimes and over-the-counter derivatives reforms, and to defer to each other when it is justified, in line with the St. Petersburg Declaration. [...] The G20 supports the work underway to improve the assessment methodology for global systemically important insurers and the further progress in developing the Insurance Capital Standard according to the agreed timeline. The G20 strongly encourages implementation of the agreed CPMI-IOSCO Principles for Financial Market Infrastructures (FMIs), and further strengthening the regulation and oversight of FMIs. It looks forward to further progress in identifying and addressing gaps related to resilience, recovery planning and resolvability of central counterparties (CCPs), including cooperation arrangements for CCPs that are systemic across multiple jurisdictions. The G20 continues to closely monitor, and if necessary, address emerging risks and vulnerabilities in the financial system, including those associated with shadow banking, asset management and other market-based finance. It welcomes the work by the BCBS and IOSCO on criteria for identifying simple, transparent and comparable securitizations. [...] The G20 welcomes the ongoing work by the IOs, as set out in the FSB work plan on the decline in correspondent banking services, and look forward to accelerated progress in assessing and addressing this issue as appropriate. The G20 welcomes the planned work by the FSB, IMF and BIS to take stock of experiences and potential lessons with macro-prudential frameworks and tools, and report back to us by our meeting in July. The G20 remains committed to strengthen the financial inclusion agenda. It asks the Global Partnership for Financial Inclusion (GPFI) to produce a framework for implementing the G20 SME Finance Action Plan, and explore developing a set of high-level principles on digital financial inclusion, and improving data collection and indicators.
    
7. Widespread, consistent and effective implementation of G20/OECD Base Erosion and Profit Shifting (BEPS) project is critical for a fair and modern international tax system. [...]We also welcome the new proposal of developing a tax platform jointly by the IMF, OECD, UN and WBG, and call on them to recommend mechanisms to help ensure effective implementation of technical assistance programs, and recommend how countries can contribute funding for tax projects and direct technical assistance, and report back with recommendations at our July meeting. [...] 
    
8. We are resolved to combat decisively terrorist financing. [...] We call on all countries to join us in these efforts, including through a swift implementation of FATF standards and provisions of the UN Security Council Resolution 2253 in all jurisdictions. [...]
    
9. Recognizing the pressing environmental challenges and the importance of mobilizing green finance, we have established the G20 Green Finance Study Group (GFSG). 
   
    

Full communiqué

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