As part of the IMF’s annual meeting in Washington, José Manuel González-Páramo participated yesterday in the B-20 meeting, the international business equivalent of the G20. BBVA’s Executive Director used the opportunity to urge the G20 to develop a clear regulatory framework that complement growth economic measures.
His presentation was part of the panel, Moving toward a resilient global economy: Is the next financial crisis right around the corner? BBVA’s Executive Director used the session to analyze the impact of the financial sector reforms promoted by the G20 and the current status of the sector. He also explained his vision of the role the G20 should play to foster a more resilient financial sector in the new regulatory environment.
First of all, he underscored how implementing the regulatory agenda has helped to increase the quality and quantity of global institutions’ assets. He also expressed his conviction that the systemic institutions (too-big-to-fail) are currently more resilient and pose less risk for governments and tax payers.
Along these lines, he offered the experience of the Spanish financial crisis as an example. In this case, he recalled the importance of recognizing the problem as early as possible and improving the transparency of the information financial institutions provide.
Secondly, regarding the future role of the G20, José Manuel González-Páramo underscored the need to develop measures that promote growth and complement regulatory reforms. He also focused on the need to improve cooperation and coordination among public and private sector and defended openness and transparency as the keys to prosperity, not protectionism.
An example of this coordination is the revision of the Basel capital framework, which will help to create a fairer regulatory treatment, and facilitate comparisons of capital ratios. In any case, he warned about the possibility that, in the search for a greater comparability, it can lose sensitivity to risk and has not been in favor to increase capital requirements significantly
From left to right José Manuel González-Páramo, BBVA's Executive Director; P- Hung Tran, Executive Managing Director at the Institute of International Finance; Stormy-Annika Mildner, Sherpa B20 Alemania; Robert Milliner, Senior Adviser, International Affairs at Wesfarmers Limited; Joerg Stephan, Deputy Director General G20 Policy Federal Ministry of Finance and Axel Weber, UBS Chair
B20: what is it?
The B20 or Business 20 is a platform that meets regularly, bringing on board relevant leaders from global enterprises and business organizations of the countries that make up the G20, in order to convey their vision and recommendations on major economic and financial challenges to the G20 governments and plot a path toward sustainable and balanced economic growth.
The B20 meetings take place concomitantly with the G20 ones. This year’s G20 summit was hosted last month in the city of Hangzhou, under China’s chairmanship. The next G20 summit will be hosted by Germany, and will take place in 2017.
Under the German presidency the following workgroups have been established, which will be responsible for making recommendations to the G20.
- Trade & investment
- Energy, climate and resource efficiency
- Financing growth & infrastructure
- Employment & Education
Also, two cross-thematic groups have been defined, focusing on:
- Responsible Business Conduct & Anti-Corruption
Traditionally, BBVA has played a relevant role in the drawing up of the proposals referred to the Financing Growth workgroup (this year, Financing Growth & Infrastructure), responsible for defining the role of the financial system as driver of economic growth, with a sharp focus on the regulatory agenda. The group tries to issue recommendations in regulatory matters for the financial system aimed at - besides promoting the system’s stability – promoting economic growth, trade and investment. This year, just as in the company did in China, BBVA will continue playing an active part in the cross-functional SME Development team, which seeks to boost the role of small and medium sized enterprises as drivers of growth and employment.
Also, taking the opportunity afforded by the creation of the Digitalization group, we will stress the importance of digital technological development, where regulation also plays a defining role, not only as mechanism to protect consumers, but in helping leverage the advantages that these technological advances bring.