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1. The Leaders of the G20, met in Hangzhou, China on 4-5 September 2016.
2. The G20 met at a time when the global economic recovery is progressing, resilience is improved in some economies and new sources for growth are emerging. But growth is still weaker than desirable. Downside risks remain due to potential volatility in the financial markets, fluctuations of commodity prices, sluggish trade and investment, and slow productivity and employment growth in some countries. Challenges originating from geopolitical developments, increased refugee flows as well as terrorism and conflicts also complicate the global economic outlook. [...]
14. To unleash the potential of digital economy, members of the G20 deliver the G20 Digital Economy Development and Cooperation Initiative, which builds on their work begun in Antalya. They aim to foster favorable conditions for its development and to address digital divide, including through expanded and better and affordable broadband access, flow of information for economic growth, trust and security, while ensuring respect for privacy and personal data protection, investment in the ICT sector, entrepreneurship, digital transformation, e-commerce cooperation, enhanced digital inclusion and development of micro, small and medium-sized enterprises (MSMEs). [...]
More Effective and Efficient Global Economic and Financial Governance
17. The leaders endorse the G20 Agenda Towards A More Stable and Resilient International Financial Architecture. They will continue to improve the analysis and monitoring of capital flows and management of risks stemming from excessive capital flow volatility. They look forward to the IMF's review of country experiences and emerging issues in handling capital flows by year-end. The G20 note the ongoing work on the review of the OECD Code of Liberalization of Capital Movements. Members of the G20 support work to further strengthen the Global Financial Safety Net (GFSN), with a strong, quota-based and adequately resourced IMF at its center, equipped with a more effective toolkit, and with more effective cooperation between the IMF and regional financing arrangements (RFAs), respecting their mandates. [...] Following the IMF's decision, they welcome the inclusion of the RMB into the Special Drawing Right (SDR) currency basket on October 1st. The leaders support the ongoing examination of the broader use of the SDR, such as broader reporting in the SDR and the issuance of SDR-denominated bonds, as a way to enhance resilience. In this context, they take note of the recent issuance of SDR bonds by the World Bank in China's interbank market. The leaders welcome further work by the international organizations to support the development of local currency bond markets, including intensifying efforts to support low-income countries.
18. Building an open and resilient financial system is crucial to supporting sustainable growth and development. To this end, the leaders remain committed to finalizing remaining critical elements of the regulatory framework and to the timely, full and consistent implementation of the agreed financial sector reform agenda, including Basel III and the total-loss-absorbing-capacity (TLAC) standard as well as effective cross-border resolution regimes. They reiterate their support for the work by the Basel Committee on Banking Supervision (BCBS) to finalize the Basel III framework by the end of 2016, without further significantly increasing overall capital requirements across the banking sector, while promoting a level playing field. The leaders welcome the second annual report of the Financial Stability Board (FSB) on implementation and effects of reforms, and will continue to enhance the monitoring of implementation and effects of reforms to ensure their consistency with their overall objectives, including by addressing any material unintended consequences. The leaders will continue to address the issue of systemic risk within the insurance sector. They welcome the work towards the development of an Insurance Capital Standard (ICS) for internationally active insurers. The G20 are committed to full and timely implementation of the agreed over-the-counter (OTC) derivatives reform agenda, and we will remove legal and regulatory barriers to the reporting of OTC derivatives to trade repositories and to authorities' appropriate access to data. The leaders encourage members to close the gap in the implementation of the Principles for Financial Market Infrastructures and welcome the reports by the Committee on Payments and Market Infrastructures, International Organization of Securities Commissions and FSB on enhancing central counterparty resilience, recovery planning and resolvability. Recognizing the importance of effective macroprudential policies in limiting systemic risks, they welcome the joint work by the IMF, FSB and Bank for International Settlements (BIS) to take stock of international experiences with macroprudential frameworks and tools and to help promote effective macroprudential policies. The leaders welcome the FSB consultation on proposed policy recommendations to address structural vulnerabilities from asset management activities. Members of the G20 will continue 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. The leaders will continue to address, through the FSB-coordinated action plan, the decline in correspondent banking services so as to support remittances, financial inclusion, trade and openness. They look forward to further efforts to clarify regulatory expectations, as appropriate, including through the review in October by the Financial Action Task Force (FATF) of the guidance on correspondent banking. The leaders call on G20 members, the IMF and WBG to intensify their support for domestic capacity building to help countries improve their compliance with global anti-money laundering and countering the financing of terrorism (AML/CFT) and prudential standards. The leaders endorse the G20 High-level Principles for Digital Financial Inclusion, the updated version of the G20 Financial Inclusion Indicators and the Implementation Framework of the G20 Action Plan on SME Financing. [...]
19. The leaders will continue their support for international tax cooperation to achieve a globally fair and modern international tax system and to foster growth, including advancing on-going cooperation on base erosion and profits shifting (BEPS), exchange of tax information, tax capacity-building of developing countries and tax policies to promote growth and tax certainty. [...] The leaders ask the OECD to report back to the finance ministers and central bank governors by June 2017 on the progress made by jurisdictions on tax transparency, and on how the Global Forum will manage the country review process in response to supplementary review requests of countries, with a view for the OECD to prepare a list by the July 2017 G20 Leaders' Summit of those jurisdictions that have not yet sufficiently progressed toward a satisfactory level of implementation of the agreed international standards on tax transparency. Defensive measures will be considered against listed jurisdictions. [...]
Robust International Trade and Investment
26. Members of the G20 reaffirm their determination to ensure a rules-based, transparent, non-discriminatory, open and inclusive multilateral trading system with the World Trade Organization playing the central role in today's global trade. [...]
27. The leaders commit to ratify the Trade Facilitation Agreement by the end of 2016 and call on other WTO members to do the same. They note the important role that bilateral and regional trade agreements can play in liberalizing trade and in the development of trade rules, while recognizing the need to ensure they are consistent with WTO rules. [...]
Further Significant Global Challenges Affecting the World Economy
42. The outcome of the referendum on the UK's membership of the EU adds to the uncertainty in the global economy. Members of the G20 are well positioned to proactively address the potential economic and financial consequences stemming from the referendum. In the future, they hope to see the UK as a close partner of the EU.
43. The leaders reiterate their commitment to sustainable development and strong and effective support and actions to address climate change. Members of the G20 commit to complete their respective domestic procedures in order to join the Paris Agreement as soon as their national procedures allow. [...]