Miguel Pesce, head of the Central Bank of the Argentine Republic, participated in the meeting of Ministers of Economy and Presidents of Central Banks of the G20 held virtually and in person in Venice, on July 9 and 10.
In it, the members of the G20 addressed issues related to the global economy and health, economic recovery and the transition towards sustainable, inclusive and environmentally friendly societies and economies. They also addressed support for the most vulnerable countries, international taxation and financial sector issues, including sustainable finance and the risks that climate change poses to financial stability. These aspects were reflected in the meeting’s communiqué.
A milestone of the meeting was the multilateral agreement on international taxation to meet the challenges of digitalization. The members of the G20 signed its two pillars, rules for the allocation of benefits between countries and the global minimum rate for multinational companies. This is a step towards a fairer international tax system, based – among other aspects – on multinational companies paying taxes where they actually operate.
The meeting also highlighted the progress in the approval process of the allocation of special drawing rights (SDRs) of the International Monetary Fund for 650 billion dollars, as well as the extension of the debt suspension initiative to low-income countries (DSSI); and the first steps in the implementation of the Common Framework (CF) for the treatment of debts beyond the DSSI (Chad and Ethiopia).
In his speech, the president of the BCRA highlighted the progress made in banking regulation since the global financial crisis, and how they have allowed the financial system to act as a buffer and not as a propagator of the economic impact of COVID-19; however, he pointed out that it is necessary to extend analysis and regulation efforts to non-bank financial intermediaries, including their interrelationship with the banking system, the real economy and capital flows. In this regard, he stressed that efforts should be made to reduce the procyclicality in international financial conditions induced by risk rating agencies.
The next meeting of G20 finance ministers and central bankers will take place in October 2021.
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