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G20 Seoul Summit - Financial sector reforms - EY - Global

Overview

G20 Seoul Summit
Financial sector reforms

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The ability to maintain global consistency will undoubtedly continue to be a serious challenge with significant consequences for global businesses and markets.

The ability to maintain global consistency will undoubtedly continue to be a serious challenge with significant consequences for global businesses and markets.

Notwithstanding their endorsement of national discretion noted above, the G20 leaders recommitted to work in an “internationally consistent and non-discriminatory manner” to strengthen regulation of hedge funds, OTC derivatives, and credit rating agencies.

They also recognized the need for consistent and coordinated regulatory reform to avoid regulatory arbitrage and the creation of unlevel playing fields.

They committed to ensure that national authorities implement global standards consistently and agreed to monitor one another’s implementation on an ongoing basis.

Nevertheless, the ability to maintain global consistency will undoubtedly continue to be a serious challenge with significant consequences for global businesses and markets.

Work for future G20 summits

The G20 also identified a wide range of areas for future work, including:

  • Macro-prudential policy frameworks (that is, national frameworks to deal with financial system-wide risk)
  • Strengthening regulation and oversight of “shadow banks” additional work on the regulation and supervision of commodity futures markets
  • Efforts to improve market integrity and efficiency
  • Enhance consumer protection

Other commitments beyond financial sector reform

The G20 continues to make a diverse set of commitments beyond those necessary to address the financial crisis.

These will drive the global and national policy making agenda, and some will present opportunities for the private sector. The G20 leaders’ agreement in these areas demonstrates recognition that sustainable economic development in developing and low income countries is vital to the long term health of the global economy.

G20 commitments include the following:

Anti-corruption 
The G20 leaders committed to support and build on current global anti-corruption mechanisms, including by engaging with private sector stakeholders in the development and implementation of anti-corruption practices. The G20 leaders also agreed to report annually on individual and collective progress.

Financial inclusion
The G20 leaders set out a series of commitments relating to developing and low income countries. These include the launch of a global partnership for financial inclusion in an effort to increase access to finance and support the contribution of small and medium sized enterprises to economic development.

Development
The G20 issued the Seoul Development Consensus for Shared Growth that sets out the G20 commitment to work in partnership with developing and low income countries to promote growth.

This is accompanied by a multi-year development action plan that focuses on concrete measures and calls for coordination with development banks, other governmental bodies, and the private sector (e.g., as a source for technical support and job growth, and also as a source for innovative business solutions for sustainable development).

As part of its action plan, the G20 supports the development of more effective national tax systems and work to prevent the erosion of domestic tax revenues.

International Financial Institutions (IFIs, including the World Bank and the IMF) 
Reforming the IFIs has been a key post-financial crisis action item. In Seoul, the G20 leaders endorsed a package of reforms that enhance emerging market representation in IMF governance and adjust member countries’ financial commitments and voting power (quotas).
This represents a genuine achievement on a highly controversial topic.

The G20 also is taking on an array of other concerns, including:

  • The need to fight protectionism
  • Promote trade
  • Address energy and environmental challenges, including the threat of global climate change and the need for green growth

Moving forward

France will chair the G20 in 2011 and will host the G20 Summit next November.
Mexico will chair the G20 in 2012.

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About Overview

  • Welcome to EY’s Overview series. These documents provide a concise overview of relevant topical or fast-moving global public policy and regulatory issues and are designed to give you current information on emerging developments.

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Contacts

If you have any questions regarding the information in this Overview, please contact your Area Regulatory and Public Policy leader, Beth Brooke or Felice Friedman.

Global Public Policy
Beth Brooke : +1 202 327 8050
Felice Friedman : +1 202 327 6253

Americas
Les Brorsen : +1 202 327 5968

Asia-Pacific
Tony Smith : +61 2 9248 4125

EMEIA
Jeremy Jennings : +32 2 774 9672

Japan
Makoto Usui : +81 3 3503 1196

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