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· Mark Carney, Governor, Bank of England and Chairman of the Financial Stability Board (FSB), and Professor Klaus Schwab, Founder and Executive Chairman, World Economic Forum, announced on the 26th January the creation of a high-level Taskforce to address the future of the global financial system
· The Taskforce, which met for the first time in Davos, comprises eight senior decision-makers from Citigroup, BlackRock, HSBC, Bank of America, Reserve Bank of India, IMF, Chinese University of Hong Kong
· The group will focus on the inclusion of emerging market economies in the global financial system, technology-enabled innovation and the economic cost-benefit of post-crisis regulatory reforms as outlined here
Geneva, Switzerland, 26 January 2016 – Eight senior decision-makers in global finance and economics have agreed to join a high-level Taskforce focused on the Future of the Global Financial System. This group, which was formed at the request of Mark Carney (Governor, Bank of England and Chairman of the Financial Stability Board), and Professor Klaus Schwab (Founder and Executive Chairman, World Economic Forum) will work to identify, analyse and propose recommendations in response to major transformative forces influencing the future of global finance and economics.
Private sector members of the Taskforce include: Michael Corbat, Chief Executive Officer, Citigroup; Laurence Fink, Chairman and Chief Executive Officer, BlackRock; Douglas Flint, Chairman, HSBC; and Brian Moynihan, Chairman and Chief Executive Officer, Bank of America. These private sector institutions are joined by Mark Carney, Governor, Bank of England; Raghuram Rajan, Governor, Reserve Bank of India; Min Zhu, Deputy Managing Director, International Monetary Fund; and Liu Mingkang, Distinguished Research Fellow in Global Economics and Finance, Chinese University of Hong Kong.
"The Taskforce is bringing focus to issues we all are dealing with as we help drive the real economy to responsible and sustainable growth. I appreciate the partnership among the members and with the World Economic Forum on these important matters,” Brian Moynihan said.
A recent document authored by the Financial Services team of the World Economic Forum and Anders Borg, the Chair of the Forum’s Future of the Global Financial System Challenge, offers five critical areas ripe for the group’s exploration during its inaugural meeting, in addition to 10 corresponding policy recommendations.
· Emerging markets occupy an increasingly important role in the international financial system. Bolstered by globalization, relative political stability and rapid urbanization, emerging-market countries represent an ever larger piece of the global economic pie, raising questions about the relevance and legitimacy of the existing financial architecture. Borg said: “The global financial system needs to take stock of important ongoing changes. Emerging market countries play an ever more crucial role in global markets and economics – financial governance, cooperation and coordination need to adapt to this reality.”
· Technology is rapidly redrawing the boundaries of the financial system, allowing new entrants that fall outside the traditional domain of policy-making to emerge and fill gaps left by incumbents. These alternative providers of capital possess the potential to transform the financial services landscape with important implications for the design and delivery of financial services.
· Regulatory and monetary policies since the financial crisis have been re-geared to better ensure the safety and soundness of the financial system and to support economic growth. It is now incumbent on the industry and policy-makers to assess the impact of these decisions on the delivery of core financial services activities as well as the associated impact on systemic stability.
· Loss of trust in financial services is another major repercussion of the global financial crisis and has been extremely costly to society. A commitment is required to ensure that the financial system can meet society’s needs today and in the future.
· Financial inclusion is recognized as critical to poverty reduction and economic growth and has become a strategic priority for national governments and businesses across a number of industries. The digitization of financial services has significantly increased the number of financially included individuals over the past few years. However, to accelerate progress, extensive cross-sector collaboration, innovation and investment remain essential.
"This document from the World Economic Forum provides a timely and important reminder of the priority actions needed to harness the restored strength of the financial system to support global growth and financial stability," Douglas Flint said.
Giancarlo Bruno, Head of Financial Services at the World Economic Forum said that “as the institution for public-private cooperation, the Forum is uniquely positioned to unite the relevant stakeholders of the financial system in an effort to devise an effective framework that supports the international financial system of the future in fulfilling its mandate to society.”
The Taskforce will continue to explore these themes and others throughout 2016, with the ultimate objective of publishing a more comprehensive suite of recommendations and actions during the Annual Meeting 2017 in Davos.
Notes to Editors
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