The first G20 Finance Ministers and Central Bank Governors' meeting within Russia's Presidency was held on February 15-16 in Moscow (Russia).
During the discussion of traditional for G20 agenda issues delegates agreed, that tail risks to the global economy have receded and financial market conditions have improved. For ensuring sustainable public finances advanced economies are planning to develop credible medium-term fiscal strategies in line with the commitments made by our Leaders in Los Cabos by the St.Petersburg Summit. Within the meeting an assessment process on the implementation of G20 countries' structural reform commitments had been adopted. G20 countries reiterated their adherence to exchange rate flexibility and they also refrained from competitive devaluation and all form of protectionism.
One of the key issues in the G20 agenda was the importance of urgent need to ratify the 2010 IMF Quota and Governance reform and completing enhancing the credibility, legitimacy and effectiveness of the Fund as agreed at the Seoul Summit. Particularly, delegates reaffirmed that during the process of ratifying 2010 IMF Quota and Governance reform the distribution of quotas based on the formula will better reflected the relative weights of IMF members in the world economy, which have changed substantially in view of strong GDP growth in dynamic emerging market and developing countries. In addition, G20 countries reaffirmed the need to protect the voice and representation of the IMF poorest members as part of this General Review of Quotas. Recognizing the importance of effective financial safety nets delegates are planning to enhance cooperation between Regional Financial Arrangements (RFAs) and the IMF and also to develop policy recommendations for their further work by the time of the Leaders' Summit in St.Petersburg.
Concerning financial regulation reforms there was mentioned a progress in implementing most of the directions of the reforms leading by the Financial Stability board (FSB). Delegates altogether welcome the establishment of the FSB as a legal entity with greater financial autonomy and enhanced capacity to coordinate the development and implementation of financial regulatory policies. There should be particularly marked some issues: urging all the jurisdictions to adopt the agreed Basel III; intention to develop operation resolution plan for all global systemically important banks; strengthening the oversight and regulation of the shadow banking sector to deliver policy recommendations for the oversight and regulation of the shadow banking sector by the Leaders' Summit; re-establish work process by the FSB to reduce reliance on external credit ratings agencies.
Further work on the financial inclusion includes the progress report will be prepared by the Global Partnership for Financial Inclusion (GPFI) in implementing the Financial Inclusion Action Plan and expecting the GPFI with support from the Alliance for Financial Inclusion, CGAP, IFC, OECD and the World Bank to expand the G20 Basic Set of Financial Inclusion Indicators to cover innovative approaches, quality of products, financial literacy and consumer protection by the meeting in July 2013. The FinCoNet members will report on consumer protection supervisory tools and best practices to support supervisory bodies, based on the World Bank Global Survey on Financial Consumer Protection.
Apart from the traditional G20 agenda's issues delegates considered Russia's priority issues - the financing for investment and government borrowing and public debt management. As for the government borrowing and public debt management issue delegates asked the IMF and the World Bank take stock of the existing guidelines, namely the "Guidelines for Public Debt Management," with a view to ensuring that they remain relevant and topical and prepare their proposals for enhancement in assess risks to public debt sustainability. The OECD continues working on review leading practices for raising, managing and retiring public debt.
During the meeting delegates advanced a common opinion that the financing for investment is a key factor for economic growth and job creation in all countries. Delegates plan to establish a new Study Group on Financing for Investment, which together with the international organizations will analyze obstacles and limitations delaying long-term financing and also they determine a work plan for the G-20. Some of the international well-known organizations will be prepared reports on analysis current economic environment, different government and market-based instruments and incentives used for stimulating long-term investments and other issues concerning with the financing for investment. These reports will help G20 countries to develop recommendations in stimulating long-term investments by the Leaders' Summit in St.Petersburg.
At the close of the meeting Finance Ministers and Central Banks Governors approved and signed off the Communiqué.