Inclusion, digital and sustainable finance, health, and taxation at the G20 Finance and Central Bank Deputies meeting

High-ranking officials from the G20 Finance track membership and representatives from guest countries and international and regional organizations gathered for the second day of the first Finance and Central Bank Deputies meeting under the G20 Italian Presidency.

Today's meeting was preceded by a symposium on finance and digitalization, opened by Markus K. Brunnermeier, Edwards S. Sanford Professor of Economics and Director of the Bendheim Center for Finance, Princeton University. In his keynote address, Professor Brunnermeier's touched on different issues related to money and payments in the digital age, including the rise and potential impact of new platforms, the evolving balance of powers in the relationship between financial service providers and customers, and the implications of financial innovation for the design of regulation, for international coordination, and for financial stability. These issues closely involve the role of central banks and point to the need to rethink money in the digital age.

The digital transformation of the economy, accelerated by the Covid-19 pandemic, brings about potentially significant benefits and challenges. This has been the subject of discussion in today's meeting of G20 Deputies, during which Italy presented the priorities and work program of the Finance Track this year, concerning financial regulation and financial inclusion, international taxation, the financing of pandemic preparedness, and sustainable finance. The program received full support.

The pandemic will continue to morph global economic developments well into 2021 and may leave persistent legacies, such as higher inequalities and corporate weaknesses. From the perspective of financial stability and regulation, it will be essential to draw lessons from the crisis, particularly on how the financial sector, including non-bank finance, has fared against the shock and on whether the regulatory framework may need to be adjusted. Another important priority for the Italian Presidency in the financial sector area is the timely implementation of the Roadmap on enhancing cross-border payments endorsed under the Saudi presidency. A third especially relevant objective is the re-establishment of the Sustainable Finance Study Group, which will help understand how the financial sector can contribute to achieving a green transition and align with the sustainable development goals.

To ensure that the benefits of international cooperation are reaped equally by all, sustainability must go hand in hand with inclusion. Under the Italian G20 presidency, the Global Partnership for Financial Inclusion (GPFI, co-chaired by Banca d'Italia's Magda Bianco) will work to design policies and action plans enhancing the digital financial competencies and awareness of individuals as well as of micro-, small and medium enterprises. It will also lay the groundwork for a new conduct supervisory framework, with a view to the development of responsible and inclusive digital financial services and the provision of adequate protection for final customers. Finally, the GPFI will continue its work to reduce the costs of remittances - still a crucial source of financing in many countries.

On international taxation, the G20 will continue working to address the tax challenges arising from digitalization in the economy. It will strive to ensure that profits are taxed where the value is generated, with a view to reaching a global and consensus-based solution to this issue. In terms of tax transparency, the Italian presidency will focus on the importance of information sharing among different jurisdictions to combat tax evasion and avoidance, on the promotion of tax certainty and effective dispute resolution, and the enhancement of developing countries' capacity in tax policy and tax administration. Sustainability will be crucial in this area, too: the 2021 G20 High-Level Tax Symposium will revolve around the role that tax policy can play in supporting the transition to a low-carbon global economy, promoting green technologies and investments, and encouraging extensive use of more efficient and less polluting energy sources.