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Financial inclusion 22 Mar 2017

The B20 promotes inclusive growth

B20 (the official business dialogue of the G20) defends that the world’s 20 most developed countries should promote inclusive growth, while ensuring the financial stability of the system. BBVA Executive Board Director José Manuel González-Páramo, in his capacity as co-chair of the Financing Growth and Infrastructure taskforce, explained today in Paris the importance of developing a coherent and proportionate regulatory framework, especially in the digital regulation arena, as fundamental pillar to promote inclusive growth.

Inclusive growth that supports citizens and SMEs is one of the recommendations that the B20 will submit to the chiefs of state and heads of government of the G20 in the next May Summit. BBVA Executive Board Director José Manuel González-Páramo, in his capacity as co-chair of the Financing Growth and Infrastructure taskforce, participated today in a round table in Paris to discuss the action plan to foster SME access to finance. This is the last conversation before the May summit.

José Manuel González-Páramo devoted some time to analyze regulatory issues. The Executive Board Director emphasized the need to develop a coherent and proportionate regulatory framework. For that, he advocated the need to carry out detailed impact assessments that allow identifying possible unintended consequences. In particular, access of SMEs to finance is one of the challenges of the future. It is necessary to improve transparency, as well as to reduce information asymmetries and legal uncertainties that increase risk to lenders.  He made reference to areas such as credit reporting, collateral registries and insolvency.

It is necessary to improve transparency, as well as to reduce information asymmetries and legal uncertainties that increase risk to lenders

José Manuel González-Páramo - BBVA - B20

BBVA Executive Board Director José Manuel González-Páramo during his speech - OECD/Andrew Wheeler

He also mentioned the digitalization of finance or regulation 2.0, as one of the main contributions of the German presidency of the G20. In this regard, he made reference to the impact of digital revolution and technological disruption in growth and productivity. Thus, he argued that digital innovation can increase and expand the capacity to fund a more inclusive growth and increase access to financial services to unbanked segments of the population.

Digital innovation can increase and expand the capacity to fund a more inclusive growth and increase access to financial services

To maximize the opportunities offered by the new digital environment, BBVA’s Executive Board Director highlighted the need to devise a regulatory framework capable of balancing the promotion of innovation and the protection against its associated risks, especially in terms of consumer protection and financial stability. As basic pillar, he stressed that regulation should be applied by product or service, regardless of whether the provider is a bank or a non-bank.

In his opinion, regulatory cooperation can contribute to reduce unnecessary barriers which benefit citizens and SMEs. In short, he considers that SMEs are the backbone of the European economy and channel the benefits of G20 policies back to their local communities.

Regulatory cooperation can contribute to reduce unnecessary barriers which benefit citizens and SMEs

The OECD, through its Business and Industry Advisory Committee (BIAC), was the host of this final meeting of the B20’s taskforces. The BIAC is the branch of the OECD responsible for promoting business activity. Founded in 1962, the BIAC defends policies that allow companies, regardless of their size, contribute to growth, economic development and prosperity. Through the BIAC, business associations advise the OECD and governments in economy and competitiveness matters.

The B20, the G20 of businesses, is a forum consisting of representatives from global private companies, including BBVA, which offers recommendations to assist G20 governments’ efforts in facing the most pressing challenges of the world’s economic and financial agenda. This year, under Germany’s presidency, it is focusing on promoting resilience, responsibility and responsiveness among businesses toward a sustainable and forward looking world economy.

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