G20 FINANCE MINISTERS MEETING
DPM Hong Attends G20 Finance Ministers Meeting
to Discuss Ways to Improve Financial Stability
Deputy Prime Minister Hong Nam-ki attended the 1st G20 Finance Ministers and Central Bank of Governors Meeting of 2021 held virtually on February 26 under the Italian G20 Presidency. At the conference, Finance Ministers, Central Bank Governors, and representatives from IMF, OECD, WB, FSB discussed ways to achieve inclusive global economic recovery including digitalization and supporting the most vulnerable countries overcome economic challenges associated with COVID-19, as well as ways to improve financial stability and promote sustainable finance.
Following is a summary of DPM’s remarks.
Global Economy and Policy Action for a Transformative and Equitable Recovery
DPM Hong emphasized the importance of inclusive economic turnaround including ensuring equitable contribution to global COVID-19 vaccination globally, resolving digital inequality and providing support to the most vulnerable countries. He also suggested the “3 divide” we need to overcome in order to achieve inclusive economic recovery.
- Vaccine Divide: Since disease control is a major premise for economic turnaround, ensuring equitable contribution to global COVID-19 vaccination is as important. The Korean government is looking into ways to contribute to the distribution of vaccines to developing countries.
- Digital Divide: In order to improve digital accessibility for the vulnerable classes, the Korean government is working on providing wider public wifi access and strengthening digital education through the digital new deal.
- Country Divide: Work on extending the implementation of Debt Service Suspension Initiative for 6 months through the end of 2021, and creditors should actively prepare for the implementation of debt restructuring procedure. Also, measures to newly distribute and allocate SDR to the most vulnerable countries must be prepared promptly.
Financial Sector Issues
G20 finance ministers reaffirmed that preserving financial stability is one of the key priorities of G20 and agreed to work on addressing the impact of climate change. DPM Hong suggested 3 ways to reduce financial market volatility.
- Close cooperation between the G20 partners: G20 should take a leading role in resolving financial market uncertainty, and strengthen monitoring and cooperation to avoid negative spill-over effects. DPM Hong also emphasized that a path to monetary policy normalization should be carefully paved with close cooperation between G20 partners.
- Strengthen the resilience of the nonbanking institutions: DPM Hong emphasized the need to work on strengthening the monitoring of FX liquidity for non-banking institutions. Accordingly, the Korean government announced a framework to strengthen FX liquidity management in January 2021.
- Support the transition towards more sustainable economy: DPM Hong suggested the need for expanding sustainable financing to accelerate the transition to a low carbon economy. He also highlighted G20 should take an initiating role in addressing climate change through effectively managing Sustainable Finance Study Group, which plans to be re-established this year.
Please refer to the attached pdf