Fellow G20 Ministers and Governors, Head of International Organization, and Distinguished Delegates:
- Good morning, good afternoon, and good evening. For delegates here in Bali, I hope you had an enjoyable dinner and got some good rest last night. For those of you attending this meeting virtually, I also extend a warm welcome back to the meeting.
- On the first day of our meeting, we’ve had fruitful discussions on the global economy, global health agenda, and the international financial architecture. On the global economy, amidst heightened risks and uncertainty we are facing, Ministers and Governors have reiterated their commitment to support the path to global economic recovery. Many of us raised concerns and the urgent need to address the risk of increasing commodity prices causing persistent inflation. Furthermore, many of us underlined the need to address issues on food security, as a failure to address this may further worsen the outlook. On the health agenda, significant progress has been reached to further take forward efforts to enhance pandemic preparedness, prevention and response. We are delighted to have broad support on the establishment of the Financial Intermediary Fund (FIF) and have progressed the discussion on enhancing the coordination between Health and Finance. Furthermore, I am pleased that we have deliberated some critical elements in promoting a more stable and resilient international financial architecture. This includes advancing our discussion on capital flow, debt vulnerabilities, and appropriate policy mix particularly during the time of heightened volatility and market distress, along with how we can reaffirm our commitment to support the most vulnerable.
- Echoing on what Minister Sri Mulyani conveyed yesterday, I certainly hope that our discussion on this second day continues to uphold the high spirit of collaboration. Our discussion today aims to ensure that despite the challenging circumstances we are facing, the G20 as the premier forum for coordinating global economic issues remain committed to deliver concrete actions to support a strong, sustainable, balanced, and inclusive growth and recovery. It is important that we remain focused on what we have planned to achieve this year, as this will also send a positive message to the global community on the G20’s role and efforts to support global recovery.
- I will proceed with our fourth Session on Financial Sector Issues. In this session, we will discuss 5 (five) main topics. First, COVID-19 exit strategies for financial stability and scarring effects and NBFI; second, climate-related financial risks; third, crypto-assets; fourth, financial inclusion and digitalization; and finally, new data gaps initiatives.
[COVID-19 Exit Strategies for Financial Stability and Scarring effects]
- As part of efforts to address the negative impacts of the COVID-19 pandemic, the FSB continues to coordinate internationally in addressing financial regulatory and supervisory issues through COVID-19 response measures and monitor developments to support global recovery and maintain financial stability. As mandated by the FMCBG in February 2022, the FSB has delivered an interim report on COVID-19 exit strategies and scarring effects in the financial sector which outlines effective practices and provides policy recommendations on exit strategies and scarring effects in the financial sector to achieve even, sustainable and inclusive recovery. In this vein, we would like to hear your views on the critical challenges of exit strategies and avoiding scarring in the financial sector, which need to be taken into consideration in the report, with the aim for the report to be delivered to the G20 Summit. In addition, we would like to hear your views on other priority programs in the FSB, in particular on addressing vulnerabilities in NBFI.
[Climate-related Financial Risks]
- On climate-related financial risks, back in July 2021, the FSB published a comprehensive Roadmap to address climate-related financial risks. Today, one year after its implementation, the FSB has delivered a progress report on the implementation of the Roadmap, which focuses on the four building blocks, namely disclosure, data, vulnerability analysis, and regulatory and supervisory approaches.
- To further enhance this work, we would like to seek your guidance on the remaining key areas to accelerate the progress in implementing the FSB Roadmap for addressing financial risks from climate change.
- On crypto-asset markets, the FSB delivered an updated assessment of risks from crypto-assets. This report underlined a potential threat to global financial stability due to their scale, structural vulnerabilities, and increasing interconnectedness with the traditional financial system.
- The FSB continues to promote effective implementation of its high-level recommendations for the regulation, supervision, and oversight of ‘global stablecoin’ arrangements. In addition, the FSB has identified key regulatory and policy implications from the development of crypto-assets markets, including stablecoin markets.
- Furthermore, recent developments in crypto-asset markets also urge FSB to continue to build public awareness of risks associated with crypto assets.
- Against this background, your views on pressing issues from recent crypto-asset market developments as well as strategies to promote consistent regulatory and supervisory approaches to crypto-asset activities, will be substantial as part of safeguarding global financial stability.
[Financial Inclusion and Digitalisation]
- On the financial inclusion agenda, accelerating Micro, Small, and Medium Enterprises’ access to finance through digital financial services would promote inclusive recovery and sustainable growth. However, we need to tackle financial exclusion risk, especially for vulnerable and underserved groups.
- To address this, The G20 Presidency, together with GPFI and key partners, focuses on policies to integrate the supply side of the financial sector with its demand side. The discussion aims to formulate a framework to promote economic and financial inclusion for MSMEs, women, and youth, by harnessing the benefits of digitalisation and taking into account the balance between innovation and risk. [The framework will be built based on deliverables of the G20 Financial Inclusion Action Plan (FIAP) 2022].
- To this end, we are keen to hear your views on key issues in advancing the financial inclusion agenda, including on how to strengthen digital financial literacy.
[New Data Gap Initiatives]
- Lastly, on the work of the Data Gaps Initiative, recognizing the need to enhance data availability and provision, [including on environmental issues and the use of digitalization], the IMF in close cooperation with the Inter-Agency Group on Economic and Financial Statistics (IAG) members and the Financial Stability Boards (FSB) have prepared the work plan of the new DGI. This work plan consists of four areas, that is, climate change, household distributional information, fintech and financial inclusion, and access to private and administrative data and data sharing. In this opportunity, we would like to get your views on how we move forward with the work plan.
[Opening the Floor]
- To start our discussion, I would like to invite the lead speakers from FSB, IMF, BIS Germany, Saudi Arabia, UK and India.
- In the interest of time, please be mindful of the allocated time. Each lead speaker will have 3 minutes per institution. Later, for intervention from other delegates and invitees, the allocated time will be 2 minutes for each institution.
For the first speaker we have the FSB, Klaas, the floor is yours.