The participants of the fourth G20 Finance Ministers' and Central Bank Governors' Meeting, the closing meeting within Russia's G20 Presidency, focused on the traditional for G20 issues. They discussed recent developments in the global economy and financial sector vulnerabilities, international financial architecture reform, financing for investment, and also the decisions made in September at the G20 Leaders' Summit in St.Petersburg.
The most conclusions on risk assessment and recent developments in the global economy were approved by the G20. In particular, the Finance Ministers and Central Bank Governors marked the continuing global economic growth and positive trends in strengthening the fundamental principles providing strengthened and sustained economic growth.
Within this issue, the participants confirmed G20's commitments in implementing St.Petersburg Action Plan on fiscal deficits and government debts reduction, enhancing EU institutional fundamentals and also on conducting a wide range of structural reforms in developed countries and in emerging markets and developing countries.
In recent months, it has been repeatedly noted that the developed countries are regaining the status of the ‘driving force' in the global growth. For example, in Eurozone it is observed that economies are gradually coming out of recession. The Japanese economy is also responding to enhancing the monetary and fiscal measures. Meanwhile the economic growth in developed countries is taking place simultaneously with continuing the monetary strategy stimulation. The use of non-traditional monetary policy, on the one hand, compensates the credits contraction in the private sector reducing the speed of starting the deflation and stagnation processes in a number of countries. On the other hand it leads to the devaluation of the assets, and therefore promotes the financial bubbles and the volatility of financial markets.
On the whole, the G20 members confirmed their concern about undesirable effects and risks of the quantitative easing still conducted by some countries that is known to have caused the recent global financial crisis.
At the same time, on the emerging markets a slowdown in economic growth is observed, related with reduction in the commodity markets, enhancing the volatility on the capital markets and increasing global interest rates. Meanwhile as for the developing countries they are taking efforts to improve their investment climate and expand the opportunities for the long-term financing for investment.
Finance Ministers and Central Bank Governors marked the progress of reviewing and updating the ‘Guidelines for Public Debt Management' prepared by the IMF and World Bank including new conditions on the global debt markets. A specially established working group, jointly with the IMF and the World Bank, has prepared a number of proposals on improving parts of this document.
In this context, G20 members received an OECD intermediary report on updating its advanced experience in the issues of attracting, managing and covering the government debt including debt guarantees management. In its report, OECD marked a considerable overlap in the debt management policy and monetary policy in recent years. This experience is also to be considered while working on updating IMF and World Bank Guidelines.
As for the 2010 IMF Quota and Governance reform the G20 members re-emphasized the urgent need to immediately ratify this reform as well as finalize the 15th General Quota Review by January 2014.
Finance Ministers and Central Bank Governors also discussed the issue of responsible loaning to the countries that still do not have an access to the debt markets. Currently such countries have more opportunities to attract foreign investment financing. On October 23, 2013, Russia as the current G20 Presidency together with the Paris Club Secretariat will hold a high-level joint meeting on this issue. During the meeting it may be possible to reach certain agreements that could define further G20 steps in this field.
Long-term financing for Investment is also one of the key priorities for the Russian Presidency. The most significant outcomes are establishing the study group and approving the G20 Workplan on Financing for Investment. Next year, the G20's countries are going to implement national policy measures in financing for investment and enhancing the investment climate. Special attention will be paid to developing and monitoring the process of implementing these measures.
The G20 Finance Ministers and Central Banks Governors welcomed the progress achieved by the World Bank on the certain proposals development in the Global Infrastructure Facility Concept. Established financial project is based on the principle of coordination and cooperation within the World Bank Group and with broad range of the partners on developing process. However, some issues require further discussion. This includes defining the legal status of the mechanism, the conditions for providing credit resources, and principles on decision making.
At the same time the G20 participants discussed work on approaches to implement the G20/OECD High-level Principles of Long-term Investment Financing by Institutional Investors. It was also important to consider how to use in practice this paper by national authorities for taking relevant policy measures in creating a favorable investment climate, and for ensuring legislative control over the pension funds, insurance companies, and government investment funds.
In further presidencies, the implementation of the ambitious tax agenda agreed by G20 Leaders in St.Petersburg will be carefully monitored. The members look forward to receiving regular reports on the creating a new standard of automatic exchange of information and the implementing the BEPS Action Plan. The Final Communiqué of the G20 Finance Ministers' and Central Bank Governors' Meeting also reiterated the need to complete the allocation of comprehensive country ratings regarding the effective implementation of information exchange upon request and to ensure that the implementation of the standards are monitored on a continuous basis.
Further work will also be continued on building a safe and reliable financial system by implementing the financial reforms endorsed in the G20 Leaders' Declaration, which are aimed at further progress, including efforts to create more resilient financial institutions, ending too-big-to-fail, increase transparency and market integrity, fill regulatory gaps, address the potential systemic risks from shadow banking, and close information gaps.
In addition, within the G20 Finance Ministers' and Central Bank Governors' Meeting in Washington D.C. the international organizations presented 10 reports on the issues of the current agenda.
More information on the G20 Finance Ministers' and Central Bank Governors' Meeting can be found in the Final Communiqué.