Financing Growth & Infrastructure Recommendations
The B20 Financing Growth & Infrastructure (FGI) Taskforce published its final policy paper. The paper is the outcome of five months of intense discussions and hard work among over 100 taskforce members from 24 countries and diverse economic sectors. In five teleconferences and physical meetings in Berlin and Paris the FGI taskforce under the leadership of FGI Chair Oliver Bäte, CEO of Allianz, developed three highly relevant recommendations to the G20:
First, G20 members should boost infrastructure finance by developing and promoting bankable and investment-ready infrastructure project pipelines, enhancing the role of Multilateral Develop-ment Banks (MDBs) as catalysts for private sector investment, and fostering green finance markets. The G20 should ask the GIH and the World Bank, in close cooperation with other relevant MDBs, to actively promote the use of local, regional and global portals that provide relevant information about infrastructure projects. The G20 should encourage MDBs to further expand their role as catalysts for and not competitors to private sector investment, for example, through extending guarantees and co-financing, with a clearer focus on the construction phase of infrastructure projects. Finally, the G20 and G20 members should foster the growth of green finance markets through commonly accepted terminologies and concepts, improved publication of information, and the development of international standards for proportionate and consistent market regulation. In the area of climate-related financial disclosure G20 members should build on the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) and work towards its implementation, in particular through harmonized metrics endorsed by relevant industries and associations. This would enable investors to better assess and price climate related risk.
Second, the G20 should reaffirm its support for international cooperation, while calling on international financial standard-setting bodies and national regulators to increase regulatory coherence, transparency in the development and implementation of regulation, and accountability to G20 growth objectives, as well as facilitate the digitalization of finance. The G20 should enhance evidence-based financial standard setting by calling on international financial standard-setting bodies to adhere to good regulatory practices and Quantitative Impact Studies that measure the impact of proposed and current standards on growth. To improve the coherence in the implementation and interpretation of international standards across borders the FSB should set up a more formal mechanism for continuous and systematic cross-border dialogue between national regulators. In the area of digitalization of finance the FSB should undertake a comprehensive assessment of Fintech regulatory regimes in G20 countries. On RegTech the FSB should facilitate a dialogue between financial institutions, regulators, and business Stakeholders.
Third, the G20 members should improve conditions for foreign direct investment by supporting sta-ble legal and regulatory frameworks conductive to long-term investment – including greater tax certainty. Investors need stability and certainty when it comes to the legal and political conditions that influence the respective infrastructure projects. That is why the G20 members should, in building on the G20 Guiding Principles for Global Investment Policy-making, ensure that binding rules apply, and where required provide for grandfathering clauses and clear, sound and reliable dispute resolution mechanisms, subject in principle to national legal processes. In the area of international tax policy the G20 should focus on tax certainty and – where not already in place – issue binding tax rulings, facilitate Advance Pricing Agreements (APAs) and where required grandfathering clauses that cover the duration of long-term projects to provide a stable framework for Investment.