Pesce at the G20 Finance Ministers and Central Bank Governors Meeting

Miguel Pesce, President of the BCRA, took part in the G20 Finance Ministers and Central Bank Governors Meeting held both virtually and in person in Venice on July 9 and 10.

G20 members discussed issues related to global economy and health; economic recovery; transition towards more sustainable, inclusive and greener economies and societies; support to the most vulnerable countries; international taxation; and financial sector issues, including sustainable finance and the risks posed by climate change on financial stability. The result of their discussions is detailed in the official communiqué.

The multilateral agreement on international taxation was a milestone for facing digitalization challenges. The G20 members endorsed two core principles: the rules on the allocation of profits among countries and a global minimum tax for multinational companies. This is a step towards a fairer international tax system whereby multinational companies pay taxes where they actually conduct business, among other provisions.

G20 members highlighted the progress made on the approval process of the International Monetary Fund on the allocation of Special Drawing Rights (SDRs) in an amount equivalent to USD 650 billion, as well as the extension of the Debt Service Suspension Initiative (DSSI) for low income countries and the first steps to implementing the Common Framework (CF) for Debt Treatment beyond the DSSI (Chad and Ethiopia).

The President of the BCRA pointed out the progress that has been achieved on banking regulation since the outbreak of the global financial crisis and discussed the way the financial system played the role of buffer rather than propagator of the economic impact of the COVID-19 pandemic. However, he remarked that efforts should be made to deepen the analysis of non-bank financial intermediaries and to extend the scope of their regulation, in particular in connection with the banking system, the real economy and capital flows. In this sense, he underlined that the procyclicality in the international financial conditions triggered by credit rating agencies should be reduced.

The next G20 Finance Ministers and Central Bank Governors Meeting will be held in October 2021.

July 27, 2021.