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BRUSSELS, 23 March 2018 – WSBI released this week its annual Institutional positions to G20 decision makers. The 16-page document follows closely the themes of this year's G20 Argentina Presidency: the future of the workforce, agrifinance and infrastructure.
Titled WSBI's Institutional Position to G20 decision-makers: Building Consensus for Fair and Sustainable Development, it welcomes the G20 Argentinian presidency call to continue the G20 German presidency's initiative to further strengthen the international financial architecture and global financial safety net.
The G20 has highlighted risk associated with volatility, macroprudential measures and capital flow management tools, and pinpoints seven policy areas of particular interest to WSBI, including the appropriate regulation for better economic growth, the pressing need for impact assessment, proportionate legislation and SME financing and de-risking.
Financial education was addressed in the WSBI paper as a way to address the Argentinian presidency's position on the importance of providing citizens with tools and skills, empowering them to shape their own futures. The association notes that financial education should be a “continuous process that constantly adapts to the changing social, financial and political context, and where several actors from different sectors of society shall play a key role in improving its efforts."
Policymakers should build upon the experience of savings and retail banks, including public banks, for the development of financial inclusion policies, for the promotion of an entrepreneurial culture, and to improve the access and the use of financial services by vulnerable populations.
The WSBI position paper also flags policies needed to embrace the opportunities and address the challenges presented by technology. It also touches on promoting the development of inclusive finance and contributing to the sustainability of inclusive finance. It also looks at the need for developing digital skills, where it calls on policy that ensures that everyone has the right skills for an increasingly digital and globalised world is essential to promote inclusive labour markets and spur innovation, productivity and growth.
Financial inclusion and financial education initiatives can also indirectly empower citizens regarding their digital skills. The paper outlines how financial inclusion needs to be viewed from a gender perspective, especially for women. WSBI also sees need for greater effort to include migrants in the formal banking system. The work of development financial institutions also will be important in the workforce development puzzle. WSBI sees the Inter-American Development Bank Group (IDB Group) as a strong ally for WSBI and its members in this area.
WSBI agrees with the G20 approach to developing infrastructure as an asset class, particularly by improving the instruments designed to fund infrastructure projects. To ensure more investment, it calls for ensuring a level playing field among finance providers for long-term financing projects. WSBI added that in the area of blended finance, WSBI welcomes and fosters public–private partnerships in the framework of blended finance strategies. Working with development funders via strategic partnerships – be it foundations, development finance institutions, World Bank Group and actors alike – forms the core of sustainability-minded banks.
On agrifinance, actions are needed to increase both public and private investments in agriculture or agri-aligned sectors. Recent innovations have also paved the way for several new and promising delivery mechanisms for agri-products and services and are creating important opportunities for the sector to grow. To be successful these solutions need to be supported by governments through the development of enabling regulatory frameworks and policies which support climate resilience. Without access to finance, rural smallholders are extremely limited in their ability to expand and meet the rising demand for agriculture.
WSBI provides a laundry list within the paper of policy and measures required to support agriculture, including the need to support the availability of lines of credit through both public and private financial institutions for smallholders, providing agricultural information on insurance markets, and incentivise banks to extend partial credit guarantees to farmers.
The paper complements outreach and advocacy efforts done in March by WSBI. The association of savings and retail banks, representing 6000 banks in 80 countries, also held a conference on 21 March in Buenos Aires on the sidelines of the G20 meetings.
WSBI also takes part in G20 through B20 task force work. WSBI received news recently that will be a member once more in the B20 Financing Growth & Infrastructure Taskforce under the new Argentinian Presidency, the second time it will take part in the body.
WSBI advocated to the B20 in 2017 its 'better regulation and evidence-based regulation'. Efforts paid off, as the G20 committed at the Hamburg Summit held last year that it would work to finalise the Basel III framework without further significantly increasing overall capital requirements across the banking sector, while promoting a level playing field. It also supported the necessity to analyse the effects of financial regulatory reforms and the structured framework for post-implementation evaluation.
>> Download the G20 Institutional Positions Paper