Germany officially took over the G20 presidency from China on 1 December 2016 and then passed the presidency to Argentina on 1 December 2017. The German presidency in the finance track focused on three top priorities:
- Enhancing the resilience of the global economy
- Improving conditions for private investment in Africa (through the Compact with Africa)
- Harnessing the spread of digital technology in the financial sector.
comprises 19 states plus the EU. These countries are: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, and the United States.
In addition, Germany’s presidency tackled major issues such as the international financial architecture, international tax policy, financial market regulation and other matters of global significance, while also continuing important efforts that had been launched by previous G20 presidencies. In Germany’s view, this continuity in the G20’s work is essential.
Germany’s presidency kicked off when the deputies of G20 finance ministers and central bank governors met in Berlin on 1 December 2016. This event was followed by the initial meeting of G20 finance ministers and central bank governors under the German presidency, which was held in Baden-Baden on 17-18 March 2017. The G20 finance ministers and central bank governors also met on the sidelines of the spring and annual meetings of the International Monetary Fund and World Bank, which were held in Washington, D.C. on 20-21 April and 12-13 October 2017, respectively. Financial issues were also on the agenda at the G20 summit of heads of state and government in Hamburg, where G20 finance ministers convened for an informal working dinner. To help streamline G20 processes, two fewer finance track meetings were organised under the German G20 presidency than under previous presidencies.
Each of Germany’s three top policy priorities was the subject of a separate conference, with the aim of providing G20 partners with an opportunity to collaborate in developing policy approaches. “Towards a More Resilient Global Economy” took place in Berlin on 30 November 2016, followed by “Digitising Finance, Financial Inclusion and Financial Literacy” in Wiesbaden on 25-26 January 2017 and “G20 Africa Partnership – Investing in a Common Future” in Berlin on 12-13 June 2017. These events were complemented by the G20 high-level symposium “Global Economic Governance in a Multipolar World” (17 March 2017 in Baden-Baden) and the G20 workshop “Helping SMEs Go Global: Moving Forward in SME Finance” (23-24 February 2017 in Frankfurt). These events were organised jointly by the Federal Ministry of Finance and the Deutsche Bundesbank.
Under Germany’s presidency, important outcomes where achieved in all policy areas on the G20 finance track agenda. These outcomes are outlined briefly below.
Germany’s G20 presidency: an overview of key outcomes in the finance track
- A more resilient global economy. This was achieved by agreeing on principles to boost the resilience of G20 economies and then using these principles as a basis for formulating new national measures to be included in the growth strategies of G20 countries.
- The “Compact with Africa” initiative. The steps taken in 2017 pursued five main objectives: (1) improving the coordination of existing initiatives, (2) identifying and promoting opportunities for private and infrastructure investment in Africa, (3) providing political support for the adoption of investment agreements, (4) setting up a process for implementing the agreements, and (5) ensuring the continuation of the Compact with Africa process within the G20 finance track.
- A stronger international financial architecture, thanks to (1) principles for effective coordination between the IMF and multilateral development banks (MDBs) and for more efficient cooperation among MDBs themselves, including the development of joint principles and objectives for mobilising private capital, (2) operational guidelines for debtor and creditor countries to facilitate sustainable public finances in low-income countries, (3) a “compass” for identifying the benefits and challenges of GDP-linked bonds, and (4) the decision to task an eminent persons group with formulating specific recommendations for optimising working methods within the global financial architecture.
- An improved system for managing volatile capital flows, with a number of non-OECD G20 members joining the OECD Code of Liberalisation of Capital Movements.
- The G20 (1) reiterated its support for the Basel Committee on Banking Supervision’s work to finalise the Basel III framework and (2) adopted the Financial Stability Board’s (FSB) recommendations on asset management, central counterparties, shadow banking, and the creation of a framework for evaluating the effects of reforms that have already been implemented, and in this way advanced the implementation and further development of financial market reforms.
- Steps were taken to improve financial inclusion and financial literacy in the digital world, including a survey to measure the general financial knowledge of people living in G20 countries, expert exchanges on suitable policy measures to promote digital financial inclusion, and continued support for the G20 Action Plan on SME Financing.
- An analysis of the opportunities and risks posed by the spread of digital technology in the financial sector, as presented in a baseline study by the FSB that looked at (1) innovations in digital finance (fintechs in particular) and their implications for financial stability and (2) international regulatory approaches in this area.
- Green finance: The work of the G20 Green Finance Study Group (launched by China in 2016) and the industry-led Task Force on Climate-related Financial Disclosures was continued in 2017, with the objective of improving the identification and assessment of the financial risks resulting from environmental and climate-related factors.
- The FSB published its stocktake on cybersecurity regulations and supervisory practices in G20 countries, with the aim of boosting cybersecurity in the financial sector and thereby reinforcing the stability of the financial system.
- An initiative was launched to improve international information-sharing between existing institutions by compiling a publicly available IMF database on macroprudential instruments.
- Important progress was made in international tax law, in particular by (1) implementing a package of measures to combat base erosion and profit shifting (BEPS) by multinational corporations and (2) enhancing tax transparency (through the exchange of information on financial accounts and beneficial ownership).
- Further efforts were made to enhance tax certainty by (1) identifying specific measures to improve the reliability of legislation and to ensure more efficient application of the law and (2) maintaining G20 support to help developing countries build up their tax capacity.
- A G20-level discussion was launched to study the ways in which the shift to digital will affect taxation, and the OECD was tasked with further work in this area.
- Steps were taken to improve the environment for remittances, in particular by working to resolve problems that remittance providers face in gaining access to banking services. FSB input and a dialogue with the private sector will aid this effort.
- The Financial Action Task Force (FATF) was strengthened – in particular through more efficient governance structures and sufficient financing – with the aim of reinforcing efforts to fight terrorism financing and money laundering.
Enhancing the resilience of the global economy
The German presidency’s objective in focusing on this issue was to make the global economy more robust by boosting the resiliency of each national economy in the G20. More specifically, this meant strengthening each economy’s capacity to (1) achieve sustainable growth in the face of long-term structural challenges such as demographic change, (2) avoid excessive imbalances, risks and susceptibility to shocks, particularly due to overly high debt levels and (3) absorb shocks and quickly return to a sustainable growth path.
While the G20’s efforts to date had largely focused on improving the resilience of financial markets, Germany’s presidency placed other aspects in the foreground, such as strengthening the resilience of real economies by carrying out structural reforms. In this way, the German presidency picked up and advanced an issue that had been high on the Chinese presidency’s agenda.
To ensure that policy discussions were informed by the latest findings from science and research, the German presidency organised a conference entitled “Towards a More Resilient Global Economy”, which took place on 30 November 2016. The event was attended by over 200 G20 delegates and approximately 80 experts mainly from academia, including two winners of the Nobel Prize in Economic Sciences, Robert Shiller (Yale University) and Christopher Sims (Princeton University).
Working groups chaired by renowned scholars and representatives of international organisations held in-depth discussions on six priority topics: public debt, private debt, the real economy, taxes, capital flows, and the global financial architecture. Their task included formulating recommendations for taking action to make the global economy more resilient. The output produced at the conference provided useful input for the following day, when the deputies of G20 finance ministers and central bank governors gathered to discuss this issue.
In the run-up to these discussions, three international organisations compiled background reports illuminating various aspects of “economic resilience”. A report by the IMF looked at the macroeconomic aspects of resilience (in “A Macroeconomic Perspective on Resilience”), the OECD analysed the connections between structural reforms and resilience (in a “G20 Policy Paper on Economic Resilience and Structural Policies”), and the Bank for International Settlements highlighted the role of financial markets (in “Economic Resilience: A Financial Perspective”).
At their meeting in March 2017, the G20 finance ministers and central bank governors agreed on a set of principles for strengthening the resilience of G20 economies and called on each country to develop national measures to this end. The principles cover the following five areas: the real economy, the private financial sector, public finances, monetary policy, and international trade.
At the G20 summit in July 2017, nearly all members presented new national resilience-enhancing measures that they had included in their updated growth strategies. A total of over 50 new national measures were added. 20 of these measures, which were deemed to be especially important, were listed in the annex to the Hamburg Action Plan that was adopted at the summit. For example, several countries (Argentina, Brazil, Germany and Mexico) pledged to reduce public debt in order to ensure sustainable public finances and macroeconomic stability. Other countries announced additional measures to combat tax evasion (Italy) and corruption (France).
It is particularly encouraging that the issue of resilience is now firmly ensconced on the wider international agenda, even beyond the framework of the G20. This provides new momentum for the adoption of structural reforms and debt reduction measures. For example, as part of this year’s European Semester, all EU member states were given country-specific recommendations to enhance their economic resilience. In addition, the economic resilience of the European Monetary Union was an agenda topic at the Eurogroup meeting on 15 September 2017. There was a broad consensus at the meeting that national-level structural reforms in various areas are essential for reducing risks.
Furthermore, at the annual meeting of the IMF and World Bank in October 2017, the IMF highlighted the importance of building fiscal buffers, reducing non-performing loans and implementing structural reforms as a way to boost economic resilience, while simultaneously calling attention to current risks to financial stability. These issues are also addressed in the IMF’s World Economic Outlook and Global Financial Stability Report. Governments around the world should use the current favourable economic conditions as an opportunity to strengthen their resilience against downside risks.
Investment partnership with Africa
In an increasingly interconnected world, it is important to build global partnerships that go beyond the G20. This applies to Africa in particular. In order to foster sustainable development and local job opportunities, many African countries need to improve the conditions for private investment (especially infrastructure investment) and to reduce investment risks. To this end, the German presidency placed a central priority on the G20’s Africa Partnership. The main elements of this partnership are specified in an annex to the G20 Leaders’ Declaration adopted at the Hamburg summit:
- Improving inclusive economic growth and employment
- Developing quality infrastructure, especially in the energy sector
- Establishing a “Compact with Africa” to strengthen the framework for private finance.
The Compact with Africa initiative in the G20 finance track was launched with the objective of boosting private investment in African countries. It also aims to strengthen the links between existing initiatives implemented by G20 members, international organisations and African countries, and thereby to enhance their effectiveness and political visibility.
The Compact with Africa is demand-driven, takes country-specific circumstances into account, and is geared towards the priorities of the countries themselves. One of its key features is a set of modules with targeted measures – developed jointly by the African Development Bank, the IMF, the World Bank Group and other stakeholders – that aim to improve the macroeconomic, business and financing frameworks for private investment. The above-mentioned international organisations proposed this modular toolbox in a report presented to G20 finance ministers and central bank governors at the Baden-Baden meeting in March 2017. Each investment compact that is set up between an African country, international financial institutions and bilateral partner countries can draw on this toolbox to select a customised set of procedures and instruments adapted to the needs of each specific country.
During the course of Germany’s G20 presidency, ten African countries joined the initiative and launched – or are in the process of launching – their own investment partnerships. These countries are Benin, Côte d’Ivoire, Egypt, Ethiopia, Ghana, Guinea, Morocco, Rwanda, Senegal and Tunisia. As a first step, each of these countries produced a prospectus outlining the reforms it plans to carry out. Seven of these countries have already added more specifics to their investment partnerships by putting together a policy matrix that provides a detailed description of (a) each country’s reform projects and (b) associated assistance measures to be provided by their bilateral partners (i.e. international organisations and/or partner countries from the G20 and beyond). All of these documents are available on the Compact with Africa website (www.compactwithafrica.org). In addition, each Compact country has set up a “country team”, made up of participating stakeholders, that will act as a one-stop shop for all public sector partners and private investors. The country teams will be tasked with coordinating the investment partnership in their respective Compact country.
A decisive factor in determining the success of the Compact with Africa will be the inclusion of the private sector. Private sector actors have an essential role to play in identifying new investment opportunities, supporting the implementation of investment projects in Compact countries, and facilitating the further development of the investment partnerships. To this end, the Federal Chancellery, the Federal Ministry of Finance, the Federal Ministry for Economic Cooperation and Development and the Deutsche Bundesbank hosted an international conference entitled “G20 Africa Partnership – Investing in a Common Future”, which took place in Berlin on 12-13 June 2017. The conference, which was opened by Chancellor Angela Merkel, brought together African heads of state and government; representatives from G20 finance ministries and international organisations; and business and financial sector experts from around the world.
In the G20 finance track, the Compact with Africa will be continued within the framework of the G20 Africa Partnership, and G20 finance ministers and central bank governors will continue to monitor and support the implementation of investment agreements between African countries, international organisations and partner countries. The G20 Africa Advisory Group was established to help ensure this continuity. The group, which is co-chaired by Germany and South Africa, will monitor the Compact’s progress and will provide the G20 with regular progress reports on the implementation of the investment agreements.
Like many other G20 countries, Germany is actively involved in the Compact with Africa, serving as bilateral partner to three countries: Côte d’Ivoire, Ghana and Tunisia.
Harnessing the spread of digital technology in the financial sector
Digitalisation in the financial sector is creating a broad and rapidly growing range of potential applications that offer great opportunities for the financial system, the real economy and society, but that also harbour possible risks. For this reason, the German G20 presidency placed this issue high on its agenda, with the objective of studying how innovative digital applications and business models affect the ability of financial markets to function stably and smoothly. What is their economic potential? And what challenges might they pose? The aim in particular was to identify digital technology’s potential for fostering economic growth and financial inclusion, while simultaneously paying attention to its potential impact on financial stability. To this end, the G20 presidency hosted the conference “Digitising Finance, Financial Inclusion and Financial Literacy”, which was held on 25-26 January 2017.
In addition, the G20 finance ministers and central bank governors requested that the Financial Stability Board (FSB) conduct a study on international regulatory approaches towards technologically enabled financial innovations (fintechs). The FSB’s report (“Financial Stability Implications from FinTech: Supervisory and Regulatory Issues that Merit Authorities’ Attention”), which was presented at the Hamburg summit, identified a number of areas that call for intensified international cooperation and that will demand G20-level consultations in the coming years. The chief areas of concern were (1) cybersecurity risks and (2) the use of third-party service providers that are not subject to financial regulation.
Under the German presidency, the issue of cybersecurity in the financial sector was placed on the G20 finance track’s agenda for the first time. At their first meeting under the German presidency in Baden-Baden, the G20 finance ministers and central bank governors declared that cyberattacks pose a significant threat to the financial system – both to individual actors and to the system as a whole. Thus with the declared aim of (a) strengthening the resilience of individual actors/institutions and the financial system as a whole and (b) improving cross-border cooperation, they asked the FSB to perform a study taking stock of existing cybersecurity regulations and supervisory practices in G20 countries. The FSB’s findings were published in a report that was presented at the October 2017 meeting of finance ministers and central bank governors in Washington. The report makes a key contribution to the promotion of financial stability, and it led the participants at the Washington meeting to reiterate their goals of enhancing the international financial system’s ability to ward off cyberattacks and supporting international efforts to reinforce cybersecurity in the global financial system. The G20 asked the FSB to carry on with this important work in order to ensure the further intensification of international cooperation in this area.
International financial architecture and global financial governance
The international financial architecture was strengthened in a variety of ways under the German G20 presidency. For example, the G20 continued its discussions on how best to strengthen the global financial safety net, focusing in particular on the IMF, which is the central node of this safety net and whose 15th General Review of Quotas is set to be completed by autumn 2019.
In addition, the finance ministers and central bank governors launched or continued various initiatives targeting multilateral development banks (MDBs), with the aim of facilitating the fulfilment of (a) the Sustainable Development Goals contained in the UN’s 2030 Agenda and (b) the climate protection targets of the Paris Agreement. Given the scarcity of public sector funds, this is to be achieved by improving the efficiency of development banks and/or by mobilising private capital. To this end, at the G20 summit in Hamburg, the heads of state and government adopted the Hamburg Principles and Ambitions on Crowding-In Private Finance to support MDBs’ efforts in this area.
Hamburg Principles and Ambitions
The Hamburg Principles and Ambitions approved at the G20 summit call for a significant increase in the mobilisation of private funds by MDBs over the next three years, and they also encourage MDBs to assess and reinforce the additionality of public financing.
In addition, efforts initiated by previous presidencies to optimise MDB balance sheets and to increase infrastructure investment were continued under Germany’s G20 presidency. The G20 finance ministers and central bank governors also adopted “principles for effective coordination between the IMF and MDBs”, which focus on improving cooperation between institutions and affected countries in their joint efforts to overcome balance-of-payments crises and fostering a coherent approach both among and beyond institutions.
They also adopted operational guidelines for debtor and creditor countries to help ensure sustainable public finances in low-income countries (the document is entitled “Operational Guidelines for Sustainable Financing”). Furthermore, the G20 conducted an analysis of innovative debt instruments and, more specifically, compiled a “Compass for GDP-Linked Bonds”. The compass aims to provide interested sovereigns and investors with information about the benefits and challenges of such bonds, whose interest payments and/or debt service payments vary according to trends in the issuing country’s GDP.
Another important topic addressed at meetings during Germany’s presidency was the problem of capital flow volatility and which measures are needed to manage them. Macroprudential instruments were deemed particularly important in this connection. In addition, a number of non-OECD G20 members declared their intention to join the OECD Code of Liberalisation of Capital Movements. This code promotes the orderly management of capital flows and lays out an effective international framework for this purpose.
Finally, at a meeting in April, the G20 finance ministers and central bank governors established the Eminent Persons Group on Global Financial Governance, which is has been tasked with formulating specific recommendations to improve global financial governance, particularly the coordination between international financial institutions. The group is expected to deliver its final recommendations in October 2018 and is chaired by Tharman Shanmugaratnam, Deputy Prime Minister of Singapore.
Development and regulation of financial markets
Implementing and further developing financial market reforms
G20 members are continuing to work in concert when it comes to the development and regulation of financial markets. During the German G20 presidency, both the finance ministers and central bank governors as well as the heads of state and government reaffirmed their commitment to the full and consistent international implementation and finalisation of the reforms that were agreed upon in response to the global financial crisis. In this way, the German presidency succeeded in ensuring that the G20 remained unified on core issues, even during complicated political times.
Beyond this general commitment, a number of specific projects were launched or completed. For example, significant progress was achieved towards the finalisation of post-crisis reforms under the Basel III international regulatory framework for banks. In addition, at their Baden-Baden meeting in March 2017, the G20 finance ministers and central bank governors endorsed the FSB’s policy recommendations for avoiding structural vulnerabilities in connection with asset management activities. In July, the G20 heads of state and government welcomed various reports and documents, including recommendations and guidelines to enhance the resilience, recovery and resolvability of central counterparties. They also received a comprehensive FSB analysis assessing the adequacy of the monitoring and regulatory instruments that have been created to counteract the (remaining) financial stability risks that emanate from the shadow banking sector. The FSB’s assessment found these instruments to be adequate at present. In response, the heads of state and government agreed to continue the close monitoring of this sector.
The financial market reforms agreed by the G20 are now largely underway. As a result, a framework developed by the FSB for the post-implementation evaluation of these reforms was adopted at the July summit. This represents another important step forward in the process of regulatory reform. It was agreed in Hamburg that this framework would be put to initial use during the run-up to the October meeting of finance ministers and central bank governors.
The G20 also expressed broad-based support for the German presidency’s proposed multi-institutional, international initiative to improve information-sharing and for the IMF’s initiative to compile a publicly available database on macroprudential instruments.
All of these elements will help to strengthen the resilience of the international financial system.
Progress was also made in the G20’s efforts to improve the identification and assessment of financial risks resulting from environmental and climate-related factors. The G20 Green Finance Study Group, which was established in 2016 under China’s G20 presidency, presented its Synthesis Report at the Hamburg summit.
The report outlines specific options for improving the analysis of environment-related risks in the financial sector. In addition, it explores ways in which relevant publicly available environmental data can be made more easily accessible and usable for the purpose of financial analysis. The Task Force on Climate-related Financial Disclosures, an industry-led group initiated by the FSB, also presented its final report at the Hamburg summit. This report contains practical recommendations – targeted in particular towards large publicly traded companies and the financial sector as a whole – on the voluntary disclosure of climate-related financial risks. In addition, a G20 conference on green finance took place in Singapore on 15 November 2017.
Improving financial inclusion and financial literacy in the digital world
The spread of digital technology makes it possible for more people to take advantage of financial services, but it also increases the necessity for people to obtain financial literacy – in order to better gauge risks, for example. Against this background, a survey of financial literacy in G20 countries was conducted under Germany’s presidency, using a standardised questionnaire developed by the OECD. One of the aims of this survey was to gain a better idea of the measures that might prove most effective in promoting financial literacy. To some extent, the survey results revealed significant differences among individual countries. At the same time, however, the findings showed that there is a general need for greater financial literacy throughout the G20.
In addition, expert exchanges were launched between G20 members and non-members to identify policy measures for promoting digital financial inclusion. Discussions focused, for example, on experiences gathered with measures to improve payment services that are accessed via mobile devices as well as with measures to promote digital payments of government benefits such as social transfers.
As in past years, the German presidency also focused on the issue of improving SME access to financial services. For example, as part of their implementation of the G20 Action Plan on SME Financing, G20 members analysed their credit infrastructures for small and medium-sized businesses and identified needed reforms.
International tax policy
In the area of international tax policy, G20 members reaffirmed their commitment to work towards a fair and modern international tax system. This commitment encompasses the implementation of the package of measures to counteract base erosion and profit shifting (BEPS) by multinational corporations. In the crucial area of international tax policy, too (as with financial market regulation, see above), the German presidency succeeded in ensuring that the G20 maintained a consensus on core issues, even during difficult political times.
In order to enhance cooperation between the OECD, the G20 and developing countries, the Inclusive Framework on BEPS – which aims in particular to draw more developing countries into the BEPS process – was established in 2016. Over 100 countries have now joined the Inclusive Framework. This means that a large number of states and jurisdictions that are not members of the G20 or OECD have committed themselves to implementing the BEPS recommendations. A monitoring process has also been set up to assess the progress that states and jurisdictions are making in implementing the recommendations. Another key development was the adoption of the Multilateral Instrument, an international treaty concluded in 2016 that aims to bring about the simultaneous modification of existing double taxation agreements so that all such agreements include the new BEPS standards.
Considerable progress was also made in improving tax transparency. The automatic exchange of financial account information on the basis of the Common Reporting Standard started successfully and on time in September 2017.
In addition, the international exchange of information on the beneficial owners of companies – letter box companies in particular – was improved in order to fight more effectively against tax evasion, terrorism financing, money laundering and corruption. The resolute work that began in 2016 in response to the “Panama papers” will continue in 2018.
By starting a new initiative to improve tax certainty, the German G20 presidency put a new priority on the G20’s tax policy agenda. The G20 commissioned the OECD and IMF to produce a report on ways to enhance tax certainty, which was submitted to the G20 in March 2017 and welcomed by the heads of state and government at the Hamburg summit. In the report, the OECD and IMF propose specific measures that (a) national legislatures can take to improve the reliability of legislation and (b) national tax administrations can take to ensure more efficient application of the law. The objective here is to improve the conditions for business investment and to boost the stability of tax revenue. G20 members plan to implement the proposed measures on a voluntary basis, and the OECD and IMF will submit a progress report in 2018.
In addition, the G20 finance ministers and central bank governors affirmed their continued support for developing countries’ efforts to expand the capacity of their tax administrations. In this connection, at the G20 Africa Partnership conference in June 2017, the OECD, Kenya, Italy and Germany launched the Africa Academy Programme for Tax and Financial Crime Investigation in Kenya. The first pilot course, which took place in Nairobi in summer 2017, was a success.
Furthermore, in order to ensure that developing countries benefit as much as possible from improved tax certainty, Germany teamed up with the OECD, the IMF and the African Tax Administration Forum to organise a workshop on the issue of tax certainty, which was held in Tanzania in October 2017 and attended by representatives from African tax administrations and finance ministries.
The German G20 presidency also initiated an important G20-level discussion to study the ways in which the shift to digital will affect taxation. A key question here is how to measure and attribute value creation in digital business models that are no longer necessarily confined within national borders. At their Baden-Baden meeting in March 2017, the G20 finance ministers and central bank governors held an initial general discussion on the question of how to deal with (increasingly) digitalised value chains and data usage models. After this discussion, the OECD was asked to carry out more in-depth work on this issue. The OECD’s interim report will be awaited by the G20 finance ministers and central bank governors at their 2018 spring meeting in Washington D.C.
Other key issues
Another important matter on the German presidency’s agenda was the work that the G20 is doing to improve the conditions for remittances. This includes, in particular, a G20 action plan aiming to resolve the remaining problems that remittance providers face in accessing banking services. Under this action plan, the FSB will produce a progress report by the time the G20 finance ministers and central bank governors hold their first meeting in 2018. In October 2017, a high-level roundtable including private sector experts met in Washington D.C. to discuss the issue of remittances. Their findings and conclusions will be incorporated into the FSB’s report. Furthermore, the G20 finance ministers and central bank governors agreed in October 2017 that, if unwarranted barriers are identified that prevent remittance providers from accessing banking services, the FSB will propose by early 2018 a set of actions to eliminate such barriers. These countermeasures are then to be implemented by G20 members and international organisations.
Combating money laundering and terrorism financing
The G20 once again demonstrated unity and determination in their commitment to tackle all sources, techniques and channels of terrorism financing and money laundering. At the Hamburg summit, the heads of state and government highlighted how important it is for the Financial Action Task Force’s standards to be implemented consistently on a worldwide basis, and they declared their emphatic support for the FATF’s efforts to strengthen its clout as a central player in the international fight against terrorism financing and money laundering. In addition, G20 leaders called on all FATF member states to ensure that the FATF has the necessary resources and support to fulfil its mandate effectively. They also welcomed the reforms that were agreed upon at the June 2017 FATF plenary meeting and that aim to strengthen the governance of the FATF, including further exploration of the option to transform the FATF into a legal person.
Phasing out fossil fuel subsidies
The G20 finance ministers and central bank governors reaffirmed their determination to phase out inefficient fossil fuel subsidies in the medium term, while also takin into account the need to support poorer population groups. In addition, they encouraged all G20 countries to introduce a peer review mechanism for inefficient fossil fuel subsidies.
During Germany’s G20 presidency, concrete results were achieved in all policy areas on the G20 finance track agenda. This is a positive sign that the world’s most important forum for international cooperation on financial and economic matters is maintaining its cohesion despite the challenges posed by the current global political climate. The G20 have shown that they are prepared to engage in close and trusting cooperation, at all levels, and on all key policy issues. Given the diverse challenges facing the world in the areas of fiscal policy and more, the Federal Ministry of Finance and the Deutsche Bundesbank are pleased and proud that they, as part of the German G20 presidency, have been able to contribute to the intensification of international cooperation in the finance track.
Germany handed over the G20 presidency to Argentina on 1 December 2017. Germany will take an active role in ensuring a smooth transition and, in the spirit of continuity, will engage in close, collegial cooperation to support the Argentinian presidency’s agenda, including its agenda in the finance track. China provided this same helpful support during the transition from the Chinese presidency to the German presidency. This continuity – with policy agendas that carry over from one presidency to the next – plays a crucial role in international efforts to tackle the complex challenges of the global economy.