Resilient, sustainable and fair global economic governance creates shared prosperity. The world economy faces growing disagreement over open borders, free trade, and global regulatory standards. Reducing financial volatility and avoiding trade barriers is important, but the G20 must also develop financial and economic rules that make globalization inclusive and sustainable, and that support the 2030 Agenda. Governments must coordinate structural reforms and quell adverse effects of globalization.
Members of the Think 20 community (T20) have come up with many excellent proposals to address the challenges for G20 countries. Below we are presenting some of these ideas. All Policy Briefs can be found here http://www.g20-insights.org/
The G20 should develop active labor market programs that promote inclusive growth and reduce the risk of severe crises. It should identify global risks, using indicators of housing market misalignments, global credit-to-GDP ratios, global equity price gaps and other indicators from international organizations such as the OECD, IMF and BIS, in order to avoid crises that escalate inequality. The G20 should design financial market prudential policies (such as those based on maximum debt-to-income ratios) that reduce the incidence of severe recessions at no cost to long-run growth.
Iwata, Kazumasa, Sébastien Jean, Christian Kastrop, Chris Loewald and Nicolas Véron, “Resilience and Inclusive Growth,” T20 Policy Brief, May 16, 2017 (http://www.g20-insights.org/policy_briefs/resilience-inclusive-growth/ )
The G20 should establish a high-level expert group to identify and remove inconsistencies across financial regulatory regimes. Members should come from different countries and sectors, like banking and insurance regulation, derivatives, sovereign debt, monetary policy, systemic risk and deposit insurance. The task force would examine conflicting approaches to managing the international monetary system. The aim would be to avoid conflicts arising from currency manipulation, competitive monetary easing, macroprudential policies, and ring-fencing of domestic banking and financial sectors. The G20 should discourage the use of financial regulatory standards for international competition, and should work to better explain the benefits of regulatory standards in order to raise public support.
Allen, Franklin, Jan Pieter Krahnen, Hélène Rey, “Financial Resilience Revisited: Why Consistency in Regulation is Now Paramount – Across Sectors and Regions, and Over Time,” T20 Policy Brief, February 28, 2017 (http://www.g20-insights.org/policy_briefs/financial-resilience-revisited-consistency-regulation-now-paramount-across-sectors-regions-time/ )
Dongming, Liu, Alfredo Gutierrez Girault, Miguel Otero-Iglesias, Fabrizio Saccomanni, José Siaba Serrate, “Beyond Financial Regulation: The Need for a Broader and More Coordinated Capital Flow Management Strategy,” T20 Policy Brief, February 27, 2017 (http://www.g20-insights.org/policy_briefs/beyond-financial-regulation-need-broader-coordinated-capital-flow-management-strategy/).
Kiel Institute for the World Economy
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German Development Institute /
Deutsches Institut für Entwicklungspolitik (DIE)
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Learn more about Think 20 Germany: http://www.t20germany.org/
The G20-Insights-Platform offers policy proposals to the G20. It is a new initiative
of the Think 20 Group: http://www.g20-insights.org/
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