Stating that the grouping will work towards the creation of a stronger and more resilient global economy, the leaders attending the 2014 G-20 Summit on Sunday said that its reformation of the capital and liquidity positioning of banks will work towards a safer market.
"Strengthening the resilience of the global economy and stability of the financial system are crucial to sustaining growth and development. We have delivered key aspects of the core commitments we made in response to the financial crisis. Our reforms to improve banks' capital and liquidity positions and to make derivatives markets safer will reduce risks in the financial system. We welcome the Financial Stability Board (FSB) proposal as set out in the annex requiring global systemically important banks to hold additional loss absorbing capacity that would further protect taxpayers if these banks fail," the G-20 Leaders' Communique stated.
"Progress has been made in delivering the shadow banking framework and we endorse an updated roadmap for further work. We have agreed to measures to dampen risk channels between banks and non-banks. But critical work remains to build a stronger, more resilient financial system. The task now is to finalise remaining elements of our policy framework and fully implement agreed financial regulatory reforms, while remaining alert to new risks. We call on regulatory authorities to make further concrete progress in swiftly implementing the agreed G20 derivatives reforms," it added.
The G-20 further agreed to ensure the fairness of the international tax system and to secure countries' revenue bases.
"We are taking actions to ensure the fairness of the international tax system and to secure countries' revenue bases. Profits should be taxed where economic activities deriving the profits are performed and where value is created. We welcome the significant progress on the G20/OECD Base Erosion and Profit Shifting (BEPS) Action Plan to modernise international tax rules. We are committed to finalising this work in 2015, including transparency of taxpayer-specific rulings found to constitute harmful tax practices," the statement read.
"To prevent cross-border tax evasion, we endorse the global Common Reporting Standard for the automatic exchange of tax information (AEOI) on a reciprocal basis. We will begin to exchange information automatically with each other and with other countries by 2017 or end-2018, subject to completing necessary legislative procedures," it added.
The statement released by the G-20 further stated that it welcomed the progress made to strengthen the orderliness and predictability of the sovereign debt restructuring process.
"We encourage jurisdictions to defer to each other when it is justified, in line with the St Petersburg Declaration. We welcome the FSB's plans to report on the implementation and effects of these reforms, and the FSB's future priorities. We welcome the progress made to strengthen the orderliness and predictability of the sovereign debt restructuring process," it read.
"We endorse the 2015-16 G-20 Anti-Corruption Action Plan that will support growth and resilience," it added.
Prime Minister Narendra Modi, currently in Australia, attended the two-day long G-20 Summit held here.
The Prime Minister travels to Sydney on Sunday where he will address the Indian diaspora, before visiting Canberra and Melbourne. On November 18, he leaves for Fiji, which is the final leg of his three-nation trip.
