Says applying proportionality helps unleash financing.
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BRUSSELS, 6 December 2016 – Proportionality needs to be applied to banking sector rulemaking to help unleash growth and develop local communities, WSBI-ESBG stressed during the B20 meetings held 1-2 December in Berlin. WSBI was invited to represent its members in the Financing Growth and Infrastructure Taskforce meeting. Flanked by a knot of representatives from global banks, WSBI-ESBG urged the task force that the proportionality principle be weaved into better regulation efforts, taking into account the unique nature of locally focused banks that serve their communities and regional economies.
The Brussels-based associations, representing savings and retail banks worldwide, were invited to represent their members in the first in-person meeting of the B20 under the German presidency. In addition to the task force meeting, WSBI-ESBG has made comments on the B20 draft policy recommendations for the G20 and have called on its members to provide further input. The paper is scheduled for release in the spring.
On the global financial regulatory front, the task force sees need to integrate what they call the "Three Rs" – resilience, responsibilities and responsiveness – into the global agenda and ensure it is on the right path to drive the banking and economic policy talks. The group noted that progress has been made in financial reform, but need persists to ensure consistent follow through and better international join up. Past reforms in financial markets have achieved financial stability, but overregulation should be prevented. Proportionality, ESBG argues, should be the mindset held by policymakers when updating existing banking rules and any drafting any new laws. Concerning new entrants in the financial sector, FGI members call for a level playing field.
To foster sustainable and inclusive growth, infrastructure investment is indispensable and savings and retail banks play a role. In many countries, the policy framework is not sufficiently supportive for long-term investment. Members of the B20 FGI call on G20 leaders for more action. During the task force gathering, participants actively commented on its draft policy message to the G20. In response to investment challenges such as complexity of cross-border regulatory environment and taxation system, there is a need for a better-calibrated regulatory framework for better investment. How to make a business case is a pre-requisite for infrastructure financing, while in the process, there is a need to make a distinction between public and private infrastructure. The group called for more research to address the necessities and needs of infrastructure.
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