Digitalisation is a revolution in the world of money and payments. Technological and social transformations are disrupting the status quo. Central Banks have to ensure their money remains relevant, and the financial system has to keep pace with progress. We urge the G20 to lead the process of integrating innovations and ensure the approach accounts for economic and social dimensions while relying on technical expertise. We favour taking full advantage of change and innovation as long as financial stability risks are addressed.
Il G20 in Italia, tutte le notizie e gli aggiornamenti
Il G20, ovvero “Gruppo dei 20”, è il principale forum di cooperazione economica e finanziaria a livello globale. Si tiene ogni anno, e riunisce le principali economie del mondo, ovvero Canada, Francia, Germania, Giappone, Regno Unito e Stati Uniti (cioè i paesi del G7), i paesi del gruppo “BRICS” – Brasile, Russia, India, Cina e Sudafrica – e anche Arabia Saudita, Australia, Argentina, Corea del Sud, Indonesia, Messico e Turchia. A questi si aggiunge anche l’Unione Europea. Si tratta di un gruppo di paesi che costituiscono l’80% del PIL globale, nonché il 60% della popolazione del pianeta. Quest’anno la presidenza è dell’Italia.
The COVID-19 pandemic has highlighted long-standing fractures in the international financial system, especially weaknesses in the safety net for emerging market and developing economies (EMDEs). We present a proposal to provide short-term liquidity to EMDEs that face balance of payment stresses due to global shocks. Our proposal for a liquidity insurance mechanism would, in effect, institutionalize the ad hoc swap lines provided by the central banks of the major countries, providing and broadening access to short-term lines of credits to EMDEs.
The uneven post-pandemic recovery brings great challenges for global financial stability and sustainable growth.
The international financial architecture is not well equipped to deal with a situation in which many countries default at the same time as a result of an exogenous shock. If all creditors could be coordinated, they would agree that they would benefit from legal protection that allows the affected sovereigns to use their resources to fight the pandemic and get their economies back on track. This policy brief describes options to provide such protection, while also aligning incentives for private creditors.
Climate change can negatively affect macrofinancial stability and amplify sovereign risk. By raising the cost of sovereign borrowing for climate-vulnerable countries, it limits the fiscal space available for scaling up investment in adaptation and resilience to climate change and can threaten debt sustainability. This policy brief proposes actionable policy solutions for mitigating and managing the effects of climate change on macrofinancial stability and the cost of sovereign borrowing.
The formal arrangements for the governance of international monetary and financial crises have remained reasonably stable over the past 40 years, but the identity of the leading actors, has changed. Over this period, the role of the largest central banks – first and foremost, the US Federal Reserve (Fed), currently the most important central bank due to the international role of the US dollar, the European Central Bank (ECB), the Bank of England (BoE), the People’s Bank of China, and the Bank of Japan – has increased substantially.
The IMF estimates that State-Owned Enterprise (SOE) assets totalled US$45 trillion in 2018, close to 50% of the global GDP, and calculated the debt of the largest SOEs to be US$7.4 trillion. Clearly, SOEs have a direct bearing on the global economy. The most systemically important SOEs are the State-Owned Multinational Enterprises (SOMNEs) since they are focused on cross-border financing and business.
This policy brief warns about the risks of discontinuation of the policy responses to the COVID crisis by pursuing exit strategies too early and/or too sharply. It outlines a comprehensive strategy for limiting such risks at a global level, and offers an in-depth discussion of the EU situation. In our view, the Euro Area could be left with long-lasting scars, so that its situation requires special treatment. We therefore present some policy proposals designed to preserve and strengthen the recovery in this area.
With Environmental, Social and Governance (ESG) investing becoming mainstream, it is urgent to develop a standardised set of information that investors and companies can use in their decision-making process. Information consistency, integrity and trustworthiness, and appropriate evaluation of the impact of the ESG-related efforts are essential to ensure positive spill-over in societies, countries and the environment. We urge the G20 to play a proactive role in defining standardised disclosures and narrative, and assessing companies’ ESG policies.
Since the pandemic began, the debt situation in Sub-Saharan Africa (SSA) has been further exacerbated as the pandemic has constrained the ability of many countries to mobilise revenues; it has also raised public sector financing requirements. To close the financial gap, countries in SSA need short-term and long-term liquidity from a wide range of financiers. The G20 assumes a crucial role in resolving debt problems in SSA as the only forum that encompasses the governments of Africa’s most important creditors among industrialised countries and emerging markets.
As they fight the Covid-19 pandemic, countries across the world are pushed to spend big to weather the crisis. Due to their limited fiscal capacity, many low- and middle-income countries are facing debt distress which might lead to a future debt restructuring process. With the current conventional instrument of sovereign debt, debt restructuring is a painful process and sometimes hurts the economy more than is necessary.
The Token Economy presents revolutionary digital solutions to the traceability and certification of sequential transactions. Beyond financial markets, tokenisation has the potential to multiply all types of transaction exponentially and to develop customised investment options to suit almost any interest. Due to its universality and increasing applications, there is a need for wider supervision and a regulatory approach as we gain a better understanding of the token economy.