High-ranking officials from the G20 Finance Track membership and representatives from guest countries and international and regional organizations gathered for the second day of the first Finance and Central Bank Deputies meeting under the G20 Italian Presidency.
Today’s meeting was preceded by a symposium on finance and digitalization, opened by Markus K. Brunnermeier, Edwards S. Sanford Professor of Economics and Director of the Bendheim Center for Finance at Princeton University. In his keynote address, Professor Brunnermeier touched on a range of issues related to money and payments in the digital age, including the construction and potential impact of new digital platforms, the evolving balance of powers in the relationship between financial service providers and customers, and the implications of financial innovation for the design of regulation, international coordination, and financial stability. These issues are closely connected with the role of central banks and point to the need to rethink money in the digital age.
The digital transformation of the economy, which has been accelerated by the COVID-19 pandemic, has brought with it potentially significant benefits but also challenges. This was the subject of today’s meeting of G20 Deputies, during which Italy presented the priorities and work programme of the Finance Track for this year with respect to financial regulation and financial inclusion, international taxation, the financing of pandemic preparedness, and sustainable finance. The programme received full support.
The pandemic will continue to shape global economic developments well into 2021, and may leave persistent legacies, such as higher inequalities and corporate weaknesses. From the perspective of financial stability and regulation, it will be essential to learn from the crisis, in particular about how the financial sector, including non-bank finance, has weathered the shock and about whether the regulatory framework may need to be adjusted. Another priority for the Italian Presidency, in the financial sector area, is the timely implementation of the Roadmap on enhancing cross-border payments endorsed under the Saudi presidency. A third, especially important, objective is the re-establishment of the Sustainable Finance Study Group, which will contribute to understanding how the financial sector can help achieve a green transition and align with the sustainable development goals.
To ensure that the benefits of international cooperation are reaped equally by all, sustainability must go hand in hand with inclusion. Under the Italian G20 presidency, the Global Partnership for Financial Inclusion (GPFI, co-chaired by Banca d'Italia’s Magda Bianco) will work to design policies and action plans to enhance the digital financial skills and awareness on the part of the public, as well as of micro-, small- and medium-sized enterprises. It will also lay the groundwork for a new conduct supervisory framework, with a view to the development of responsible and inclusive digital financial services and to the provision of adequate protection for final customers. Finally, the GPFI will continue its work to reduce the costs of remittances – still a crucial source of financing in many countries.
On international taxation, the G20 will continue to address the tax challenges arising from digitalization in the economy. It will strive to ensure that profits are taxed where the value is generated, with a view to reaching a global and consensus-based solution on this issue. In terms of tax transparency, the Italian presidency will focus on the importance of information-sharing between jurisdictions to combat tax evasion and avoidance, on promoting tax certainty and effective dispute resolution, and on enhancing developing countries’ capacity in tax policy and tax administration. Sustainability will be crucial in this area too: the 2021 G20 High Level Tax Symposium will revolve around the role that tax policy can play to support the transition to a low-carbon global economy, promote green technologies and investments, and encourage the use of more efficient and less polluting energy sources.