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What Germany’s G20 presidency means for Deutsche Börse

18 Jan 2017

What Germany’s G20 presidency means for Deutsche Börse

Germany will be heading the Group of Twenty (G20) until the end of November 2017. The G20, which comprises 19 major industrialised and emerging economies as well as the European Union, represents the most important forum for the global coordination of regulatory cooperation. The presidency’s tasks include determining key agenda items as well as organising the G20 summits. In 2017, the meeting of the G20 nations’ heads of state and government will be held in Hamburg on 7 and 8 July. Throughout the presidency, the G20 summits will be complemented by various attractive events on financial policy.

What is the G20?

The G20 consists of the 19 most important industrialised and emerging economies as well as the European Union, thus representing two thirds of the global population. Collectively, the G20 members account for almost 90 per cent of gross world product (GWP) and roughly 80 per cent of world trade. Since the global financial crisis of 2007-08, the G20 has been the main forum for international cooperation on economic and monetary policy, positioning it at the centre of multilateral financial diplomacy.
The G20 presidency is always accompanied by broad non-governmental dialogue; events on economic issues are coordinated by the Business 20 (B20), a group consisting of the G20 states’ largest business associations. The B20 prepare position papers which are then discussed with the government representatives of the G20 presidency.
Financial policy: key priorities of Germany’s G20 presidency

Strengthening economic resilience

To strengthen the entire global economy, national economic policy must first of all work to build stability for times of crisis and a steadfast regulatory environment to ensure the sound functioning of financial markets as well as stable financial institutions. In particular, this applies to the organisation of the global financial security network, the International Monetary Fund (IMF)’s instruments for financial aid and the regulatory provisions for government measures regarding capital movement. In addition, efforts focus on the implementation of the G20 action plan on the financing of small and medium-sized enterprises (SMEs). When working in close cooperation, G20 members can make a significant contribution to mastering these challenges.

Shaping digitisation

The second key item on the agenda is the increasing relevance of digitisation and other innovative processes and business models for the financial sector summarised under the term “fintech”. During its G20 presidency, Germany intends to explore the potential of these innovations, such as their effect on financial market stability. One of Germany’s objectives during its presidency is to develop a secure regulatory environment which allows the full potential of new digital opportunities to be tapped, while paying full attention to financial stability risks. To do so, Germany plans to support programmes such as the Financial Stability Board (FSB)’s work programme on monitoring digital innovation in finance. It also intends to evaluate the FSB’s regulatory proposals regarding digital finance and its High-level Principles for Digital Financial Inclusion, and decide on their implementation.

Advancing long-term issues

Thirdly, the continuation of long-term goals already addressed at previous G20 meetings will remain a priority during the German presidency. This includes advancing topics such as “green finance,” which was already discussed during China’s presidency, combatting money laundering and terror funding, as well as G20-wide adherence to the OECD Code of Liberalisation of Capital Movements.

Relevance to Deutsche Börse Group

All of the issues mentioned are highly relevant to Deutsche Börse Group. This is why the G20 presidency offers us an excellent opportunity to enter into a dialogue with policymakers as well as other market participants in order to discuss key points which will set the course for shaping the financial markets of the future.

One topic of special continuing relevance to Deutsche Börse Group is digitisation in finance, as evidenced by our collaborative research project on blockchain technology with Deutsche Bundesbank, to name just one example. Furthermore, we have founded the FinTech Hub, an initiative to support the fintech community in Frankfurt and the Rhine-Main region. It connects start-ups by offering co-working spaces, consulting as well as networking services and by providing a modern event location.

Moreover, we specifically support investments in growth companies from the financial sector: via DB1 Ventures, Deutsche Börse Group’s newly instituted corporate venture arm, as well as via Deutsche Börse Venture Network®. We also announced a new exchange segment for growth companies. Thus, we are assuming the responsibility incumbent on us – by broadening funding sources for the real economy and making them accessible, in particular, for small and medium-sized companies. The new segment represents a new beginning; it is our response to the massive need for investments created by digitisation and Industry 4.0.

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