G20 Publishes Communiqué on Its February Meeting in Saudi Arabia
G20 published an official statement, also known as Communiqué, summarizing developments at the February meeting of the finance ministers and central bank governors in Riyadh, Saudi Arabia. As per the statement, G20 remains committed to the full, timely, and consistent implementation of the agreed financial reforms. It will continue to evaluate the effects of these reforms and welcomes the FSB evaluation of the effects of too-big-to-fail reforms. G20 will continue to identify, monitor and, as necessary, address vulnerabilities and emerging risks to financial stability, including those related to non-bank financing.
As per the statement, G20 will continue to work to address unintended, negative effects of market fragmentation, including through regulatory and supervisory cooperation. It will also continue its efforts to enhance cyber resilience and look forward to the FSB toolkit of effective practices for cyber-incident response and recovery. G20 will continue to monitor and address the causes and consequences of the withdrawal of correspondent banking relationships, along with the issues in remittance firms’ access to banking services. Mobilizing sustainable finance and strengthening financial inclusion are important for global growth and stability. G20 welcomes private-sector participation and transparency in these areas.
The Communiqué states that G20 emphasizes that markets need to transition away from LIBOR to alternative reference rates before the end of 2021. Therefore, urgent work is needed by the private sector, with supported from the public sector, to manage this transition, given the risks that may arise if parties are insufficiently prepared for the expected discontinuation of the widely used LIBOR benchmarks. Given the short time remaining for this transition to take place, substantial progress is needed in 2020 to address the potential financial stability risks. G20 has requested FSB to identify the remaining challenges to benchmark transition by July 2020 and to explore ways to address them.
G20 welcomes the inclusive approach of utilizing the regional consultative groups of FSB, also involving the respective financial regulation standard-setters, to consider implications associated with the growing entry of bigtech in finance. It also asks the FSB to report on the different approaches to technology-enabled-solutions for regulation and supervision (regtech and suptech). G20 supports the FSB efforts to develop regulatory recommendations with respect to global stablecoins and other similar arrangements. G20 also asks FSB, in coordination with the CPMI and other relevant standard-setting bodies and international organizations, to develop a roadmap to enhance global cross-border payment arrangements by October 2020.
Related Link: G20 Communiqué (PDF)
Keywords: Middle East and Africa, Saudi Arabia, Banking, LIBOR, Bigtech, Regtech, Sustainable Finance, Stablecoins, Cyber Risk, Suptech, G20
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