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Banking Updated: 29 Dec 2015

The corporate G20

Since the outbreak of the crisis in 2008, each G20 (Group of 20) summit arouses a great deal of international expectation. The one held in Turkey has been no exception. Antalya not only plays host to the leaders of the 20 most important countries in the world, accounting for 85% of the global economy; also present will be the business leaders of these 20 economies, at the B20 (Business 20)

B20 logo

B20: What is it?

It is a meeting at which people in the business world recommend to political leaders how to deal with the key issues in the world economy. The B20 has been of fundamental importance in constructing bridges in recent years between global economic policies and business communities.

It first met at the G20 summit in Korea in 2010 and has been convened at the subsequent summits in France, Mexico, Russia and Australia. Since was first created, it has presented over 400 recommendations to members of the G20.

This year it was the turn of Turkey to host both summits. In September, the B20 prepared its policy recommendations, which are based on two lines of work: the implementation of the measures agreed the previous year and the preparation of new recommendations.

What does it propose?

The B20 insists that the G20 should eliminate obstacles to private-sector activity, in particular favoring SMEs, intrepreneurship and the fight against corruption. These are the four lines of action they propose:

-Implement the policies already agreed in previous years. Above all, improve the performance of the global financial reform agenda and achieve greater regulatory consistency.

-Invest in the correction of imbalances through actions that include the development of specific investment strategies for each country.

The B20 proposes improving the infrastructure investment ecosystem, but above all it is in favor of development and financing projects focused on reducing differences in production capacity between countries, at technical, executive management and entrepreneurial skills level.

-Foster labor inclusiveness, particularly related to youth employment, and financial inclusion by making it easier for SMEs to find finance from banks and alternative sources, as well as providing improved access to international markets.

The B20 also promotes the incorporation of a common universal broadband connection target, improved access by SMEs to the digital economy and the creation of innovative ecosystems by increasing collaboration between different economic and social stakeholders.

-Enhance competition with instruments such as the improvement of the global trade system for the emerging digital economy, rolling back protectionist policies and the digitalization of customs procedures public procurement processes.

What about the financial sector?

The B20 is divided into seven working groups, by sectors. The Financing GrowthTaskforce has been created in the financial area. What have its priorities been?

Basically two:

-To make it easier to finance SMEs, with 2 recommendations: improve the accessibility of information on credit for such companies, reducing investor risk; and facilitate access to more solid alternative finance.

-Reform the regulatory framework: finalize and implement the Regulatory Agenda at global level and reiterate the need for greater regulatory consistency between regions and how to improve the consultation process.

How is Spain represented in this forum?

Francisco González, Chairman & CEO of BBVA, and José Manuel González-Páramo, an executive director of the bank, have headed up this working group of which BBVA forms part, aimed at developing the financial markets. The bank has focused its efforts on giving greater consistency to the regulatory framework, following the excesses imposed by the financial crisis, and on unifying criteria between countries.

Thus BBVA has supported the idea that the global agenda for financial reforms must be completed as soon as possible, as it is generating additional uncertainty in the financial sector. It also considers that this may be a good time for a regulatory pause and the right moment to evaluate the cumulative impact of regulation, as well as carrying out the necessary calibrations. Finally, the bank has highlighted the importance of looking for greater regulatory consistency during the implementation phase, to avoid national or regional interpretations. At the same time, it has requested a memorandum of understanding (MoU) between the authorities to improve the consistency of the regulation from its design and implementation. This November, the B20 has had its meeting with the leaders of the G20 to present these proposals. The overall aim has been to boost growth and accessibility to financial markets.