#bank capital adequacy under basel iii

[ghanafinancialmarket]

Banks needs more than GH¢400 million to meet the minimum capital adequacy ratio (CAR) under Basel II & III.

Banks needs more than GH¢400 million to meet the minimum capital adequacy ratio (CAR) under Basel II & III.

Banks will require more than the new capital requirement of GH¢400 million in order to meet the minimum capital adequacy ratio (CAR) under Basel II & III.

Although most banks have announced that they are close to meeting the new capital requirement before December 2018, the implementation of Basel II&III is expected to have serious implications on the CAR of banks in the country, which may force…

[sameershah692]

Bank of Maharashtra earned net profit of INR 389 crore for the FY 2019-20 as against loss of INR 4783 crore in FY 2018-19

Results at a Glance

Operating performance:

Ø  Operating profit for Q4FY20 grew by 18.73% YOY to INR 595 crores

Ø  Net Profit for Q4FY20 stood at INR 58 crores

Ø  Operating profit for FY20 grew by 29.55% YOY to INR 2847 crores

Ø  Net profit stood at INR 389 crore in FY20 as against loss of INR 4784 crore in FY19

Ø  NIM for FY20 improved to 2.60% as against 2.53% in FY19

Business Growth:

Ø  Total Business increased to INR 2,44,955 crore in FY20 as against INR 2,34,117 crore in FY19

Ø  The CASA deposit of the Bank improved to 50.29% as on 31.03.2020 as against 49.65% as on 31.03.2019

Ø  Savings Account deposits grew by 7.80% YOY, Current Account deposits grew by 9.32% YOY

Ø  Retail advances grew by 21.30 % and the MSME advances grew by 25.04 %.

Capital Position:

Ø  Overall capital adequacy at 13.52% with Common Equity Tier 1 ratio of 10.67% at the end of FY20

Ø  Liquidity Coverage Ratio at 184.74%.

Asset quality:

Ø  Net NPA declined to 4.77% as on 31.03.2020 against 5.52% as on 31.03.2019.

Ø  Gross NPA reduced to 12.81% as on 31.03.2020 against 16.40% as of 31.03.2019.

Ø  Provision Coverage ratio improved to 83.97% as on 31.03.2020 as against 81.49% as on 31.03.2019

Ø  In terms of RBI circular dated 17th April, 2020 on Covid-19, Bank has made provision of INR 150 crore in FY20 towards Covid-19 Regulatory Package Provision as against required provision @5% i.e. INR 38 crore.

The Board of Directors of Bank of Maharashtra approved the financial results for the quarter and year ended 31st March 2020 at its meeting held in Pune on Tuesday, 16th June, 2020.

 Profit & Loss Account: Period ended 31st March, 2020

۩     Operating profit increased to INR 2847.06 crore for the year ended 31.03.2020 as against INR 2197.61 crore for year ended 31.03.2019. The same was INR 595.07 crore for quarter ended 31.03.2020 as compared to INR 501.18 crore for quarter ended 31.03.2019.

۩     Net Profit stood at INR 388.58 crore for the year ended 31.03.2020 as against Net loss of INR 4783.88 crore for year ended 31.03.2019. Net profit for the quarter ended 31.03.2020 was INR 57.57 crore.

۩     Net Interest Income increased to INR 4278.80 crore for the year ended 31.03.2020 as against INR 3733.48 crore for the year ended 31.03.2019 registering a growth of INR 545.32 crore (14.61 %). The same stood at INR 1022.51 crore for the quarter ended 31.03.2020 as against INR 999.93 crore for quarter ended 31.03.2019.

۩     Net Interest Margin (Interest Spread to Average Interest Earning Assets) improved to 2.60 % for the year ended 31.03.2020 as against 2.53% for the year ended 31.03.2019.

۩     Yield on advances stood at 7.23 % for year ended 31.03.2020 as against 7.68% for year ended 31.03.2019.

۩     Yield on investment stood at 7.23 % for the year ended 31.03.2020.

Balance Sheet: As on 31st March, 2020

۩     Total business increased to INR 2,44,955 crore as on 31.03.2020 as against INR 2,34,117 crore as on 31.03.2019.

۩     Total deposits stood at INR 1,50,066 crore as on 31.03.2020 as against INR 1,40,650 crore as on 31.03.2019.

۩     CASA deposits increased from INR 69,830 crore as on 31.03.2019 to INR 75,475 crore as on 31.03.2020, registering a growth of INR 5,645 crore @ 8.08 % on Y-o-Y basis.  CASA improved to 50.29 % as on 31.03.2020.

۩     Net Advances increased to INR 86,872 crore as on 31.03.2020 as against INR 82,666 crore as on 31.03.2019, showing a growth of 5.09%.

 Capital Adequacy

۩     Capital adequacy ratio under Basel III is 13.52% as on 31.03.2020 as compared to 11.86% as on 31.03.2019.

۩     CET 1 ratio of 10.67% is well above regulatory minimum. It also reflects the ability to comfortably raise capital through various avenues.

 Asset Quality

۩     Gross NPA and Net NPA stood at INR 12,152 crore (12.81 %) and INR 4,145 crore (4.77 %) as on 31.03.2020, as against INR 15,324 crore (16.40%) and INR 4,559 crore (5.52%) as on 31.03.2019. The level of Gross and Net NPA was INR 15,746 crore (16.77%) and INR 4,507 crore (5.46%) respectively as on 31.12.2019.

۩      Provision Coverage ratio improved to 83.97% as on 31.03.2020 showing adequacy of provision.

 Bank of Maharashtra’s response to COVID-19 challenges

The past several weeks have witnessed the country battling an unprecedented crisis on account of Covid-19 pandemic. The Bank was quick to recognize the gravity of the situation. Bank took various supportive measures for the welfare of the customers/ employees. Over 97.5% of Branches and 88% of ATM were operational.

Bank waived service charges in Current and Savings account upto 30th June, 2020. Bank has introduced GECL scheme under Emergency Credit Line Guarantee Scheme. Under this scheme, Bank has been offering working capital loan upto 20% of the borrowers total outstanding credit (max upto INR 25 crore) to all business accounts with annual turnover upto INR 100 crores for FY 2019-20. Bank of Maharashtra employees donated INR 5 crore to PM-CARES Fund and INR 1 crore to Chief Minister’s Relief Fund Covid-19. Bank has undertaken various preventive measures like providing masks, sanitizers and maintaining social distancing during customers��� visit to branches. Through all 32 zonal offices countrywide, BoM has undertaken various activities to support the ‘Corona Warriors’ by distributing face masks, gloves, water bottles, food packets, canopy umbrellas, grocery items, etc.

A presentation for investors is being separately placed on the Banks website www.bankofmaharashtra.in

[businessliveme]

Oman Economy 2018-2019: Forging Ahead

Amidst tight financial conditions and growing trade tensions, the world economic activities witnessed some moderation since the second half of 2018. However, the economic activities in the Sultanate, backed by a surge in oil prices and expansion in the non-hydrocarbon sector gained further momentum in 2018.

Although financial conditions eased somewhat in 2019 with a pause in the interest rate hike by the Federal Reserve and a return to more accommodative monetary policy stance by other major central banks, a resolution to the trade tensions continues to be elusive. Fears of the global slowdown and persisting trade tensions continue to be a major source of volatility for oil prices that have seen large swings since late 2018.

Read also: OPEC+ Watchers See Extension of Deal But No Deeper Output Cuts

Opec+ countries entered into another agreement to cut production until June 2019, which has now been extended until the first quarter of 2020, to restore oil prices and reduce volatility. The trajectory of oil prices coupled with policy efforts to improve the business environment and foster private sector-led growth would condition the economic prospects of Oman during 2019.

Read more:

Oman Economy Expected to Grow 3 percent: S&P

Oman Economy on a Growth Trajectory

Natural gas key catalyst to fuelling Oman’s economy

Omani Crude

In the setting of moderating global growth, tightening financial conditions and decelerating world trade volume, it is notable that Omani economy gained further impetus. The Omani crude oil price averaged at $69.7 a barrel in 2018 as compared to $ 51.3 per barrel during 2017. The recovery in oil prices also contributed to growth in non-oil economic activities, reflecting inter-linkages, although the dependency of non-oil activities on oil activities has somewhat weakened in the last few years.

Oil & Non-Oil GDP

The nominal Gross Domestic Product (GDP) recorded a growth of 12.0 percent in 2018, higher as compared to 7.3 percent in 2017. The petroleum and non-petroleum sectors grew in nominal terms by 37.1 percent and 2.9 percent, respectively, in 2018.

As non-petroleum activities witnessed some deceleration in growth, the petroleum sector was the main driver of an accelerated growth in the Omani economy during 2018.

Notably, with Khazzan phase-I becoming operational, the natural gas under the petroleum sector is also emerging as a significant contributor to the Omani economy.

Read also: Biggest LNG producer targets 64% jump in capacity by 2027

Notwithstanding some deceleration in growth across several non-petroleum activities, the non-petroleum sector is gradually evolving as the key force for ensuring sustainable growth in the Sultanate.

The dedicated programs under the diversification plan “Tanfeedh” along with other initiatives to improve the business environment are yielding encouraging results and fostering traction in the non-hydrocarbon sector.

The Ninth and final 5-year Development Plan under Vision 2020 continues to emphasise more diversified economic activities to insulate the economy from external shocks. The government also undertook some important policy measures during 2018, viz. establishment of a commercial arbitration center, the adoption of a new commercial companies’ law, and a further streamlining of licensing processes through Invest Easy in order to improve the business and investment climate and promote private sector-led growth in the Sultanate.

Read also: Reforms to bolster private sector growth in Oman: CBO’s Amri

Inflation

With regard to the inflationary situation, the headline inflation eased to 0.9 percent during 2018 from 1.6 percent in 2017. Although imported inflation remains the major determinant of inflation, domestic factors also played a role in affecting inflationary conditions in the Sultanate.

Headline Inflation in Oman during 2018 followed a contrary trend to global inflation as consumer inflation in both AEs and EMDEs is estimated to have increased. The subdued rise in non-fuel international commodity prices, appreciation in $ exchange rate, and muted domestic demand led to benign inflation in the Sultanate.

Oman’s Fiscal Deficit

On the fiscal front, the surge in oil prices provided required support to government revenues, while fiscal measures that were undertaken last year also continued to support the growth of non-oil revenue of the government. However, at the same time, government expenditure also increased noticeably in 2018 due to higher spending on oil & gas production, defence, subsidies and elevated interest payments.

The buoyant government revenues, however, led to a decline in overall fiscal deficit by about 30 percent to RO 2,649 million during 2018. In terms of budget outcome, the actual fiscal deficit overperformed the budget estimate by 11.7 percent, with much higher overshooting in the government revenue vis-à- vis the government expenditure.

The estimated fiscal deficit of RO 2,800 million in the 2019 budget assumes an average oil price at $ 58 per barrel. The government debt also increased to RO 14,492 million in 2018 (a jump of about 30 percent) – the debt to GDP ratio increased to 47.5 percent.

The burgeoning government debt level not only constraints the fiscal space but also raises sustainability concerns.

Monetary Conditions

Turning to monetary conditions, the Federal Reserve raised the policy rate four times during 2018, each by 25 basis points, which were automatically transmitted to Omani monetary conditions due to the currency peg arrangement. Consequently, interest rates on both deposits and lending increased in Oman.

Nonetheless, both credit and deposits maintained reasonable growth of 6.4 percent and 7.8 percent, respectively during the year, consistent with expanding nonoil economic activities.

The broad money supply expanded by 8.3 percent– the quasi money expanded by 12.1 percent while narrow money (M1) declined marginally by 0.2 percent. Although local currency deposits also increased, a steep jump in quasi-money during 2018 was attributed mainly to a large increase in foreign currency deposits.

As the monetary base shrank, the money multiplier improved to 5.7 in 2018 from 5.0 during the previous year.

With regard to the health of banking sector and quality of assets, the position remained resilient and strong, despite early signs of some vulnerability on the back of slowing real sector.

The CBO continued with the gradual implementation of Basel III norms including capital conservation buffer to strengthen the banking sector.

Consequently, the banks remained adequately capitalized as their Capital Adequacy Ratio (CAR) stood at 17.9 percent by the end of December 2018, significantly higher than mandated by CBO at 12.875 percent. The banks in the GCC region generally maintain sufficiently higher CAR to deal with ramifications of volatile oil prices.

The quality of loans did not deteriorate much as the gross nonperforming loans (NPLs) of conventional banks stood at 2.7 percent in December 2018 (net NPLs stood at 0.9 percent).

The financial markets functioned smoothly during the year, albeit sluggish activities in some segments. The short term interest rates in the money market remained aligned and some improvement was noticed in the volume of domestic inter-bank call money market partly reflecting easing of regulation pertaining to lending ratio. The activities in equity markets were subdued and the Muscat Securities Market Index (MSM-30) closed lower by about 15 percent at the end of 2018.

The liquidity in both equity and bonds segments of the capital market also dropped during 2018. As the surge in oil prices improved foreign currency liquidity, the foreign exchange market functioned without any pressure during 2018.

Oman’s external account also witnessed a significant improvement during 2018 backed by a steep recovery in oil prices, buoyant non-oil exports, and decline in merchandise imports. The current account deficit (CAD) narrowed to RO 1,671 million during 2018 from RO 4,222 million in 2017.

The net financial & capital inflows were higher than CAD, resulting in an overall balance of payments surplus. Consequently, total net foreign assets (CBO and SGRF together) increased by RO 990 million, alleviating pressure on the adequacy of external buffers.

Imports cover of CBO’s net foreign assets increased to 7.4 months from 6.3 months a year ago.

The post Oman Economy 2018-2019: Forging Ahead appeared first on Businessliveme.com.

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[managermint]

Investopedia: What is the minimum capital adequacy ratio under Basel III?

Investopedia: What is the minimum capital adequacy ratio under Basel III?

Under Basel III, the minimum capital adequacy ratio that banks must maintain is 8%. The capital adequacy ratio measures a bank’s capital in relation to its risk-weighted assets. The capital-to-risk-weighted-assets ratio promotes financial stability and efficiency in economic systems throughout the world.

Basel III builds on the structure of Basel II but brings in higher standards for…

[aminalatif]

Government to infuse Rs 42,000 crore in PSU banks by March; next tranche likely in December

NEW DELHI: The government will infuse Rs 42,000 crore in the state-owned banks by March-end and the next tranche would be released as early as next month, a senior finance ministry official said on Monday.

The government earlier this year pumped Rs 11,336 crore in five PSBs – Punjab National Bank, Allahabad Bank, Indian Overseas Bank, Andhra Bank and Corporation Bank – to improve their financial health.

“We will infuse the next tranche of recapitalisation by mid-December. Close to Rs 42,000 crore remain to be infused as capital in public sector banks in the current financial year,” the official said.

He said that large PSBs such as State Bank of India and Punjab National Bank (PNB) may not need more capital infusion in the current financial year ending March 2019.

“Some big state-owned banks like SBI and PNB may not need further capital infusion from the government in 2018-19. PNB has already received regulatory capital twice so far,” the official said.

State-owned banks will need less capital to meet their capital adequacy norms, as the Reserve Bank of India last week decided to defer the deadline for them to meet the global norms or Basel-III requirement by a year till March 2020.

The RBI Board last week, while deciding to retain the capital adequacy requirement for banks at 9 per cent, agreed to extend the transition period for implementing the last tranche of 0.625 per cent under the capital conservation buffer (CCB) by one year — up to March 31, 2020.

Rating agency Moody’s Investors Service had last week said the decision of the RBI board to extend the timeline for banks to implement Basel III guidelines is ‘credit negative’ for PSBs.

The government announced the Rs 2.11-lakh crore capital infusion programme in October last year. According to the plan, the PSBs were to get Rs 1.35 lakh crore through recapitalisation bonds, and the balance Rs 58,000 crore through the raising of capital from the market.

Out of the Rs 1.35 lakh crore, the government has already infused about Rs 82,000 crore through the bonds.

The post Government to infuse Rs 42,000 crore in PSU banks by March; next tranche likely in December appeared first on Watch Online Pakistani Dramas.

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[mydjw]

Katsu Etsuko Amid a declining loan-deposit ratio (the ratio of outstanding loans against outstanding deposits), Japanese banks have been increasing their holdings of Japanese government bonds. The three mega banks alone held as much as approximately ¥100 trillion of both short- and long-term government bonds as at the end of March 2010. JP Bank held ¥147 trillion worth of bonds. The reasons why Japanese banks are increasing their holding of Japanese government bonds include the following: (i) Demand of corporations for financing has been contracting, as the corporate sector has been a financial surplus sector since 1998, according to the Flow of Funds Accounts Statistics of BOJ; (ii) Holding government bonds that have risk weight of zero percent (risk weighting on assets in accordance with their risk dimention) under the capital adequacy requirements by Basel committee (Bank for International Settlements (BIS) ratios) is beneficial from the perspective of capital efficiency; (iii)

[vastseek]

What is the minimum capital adequacy ratio that must be attained under Basel III?

Find out more about the capital adequacy ratio, or CAR, and the minimum capital adequacy ratio that banks must attain under Basel III. http://vastseek.com/sources/12-investopedia/61816-what-is-the-minimum-capital-adequacy-ratio-that-must-be-attained-under-basel-iii

[cleancutpage]

Capital is the Lifeblood of CRE, But Land is the Beating Heart

This post originally appeared on Marketplace Advertiser, Metropolitan Capital Advisor's blog and is republished with permission. Find out how to syndicate your content with theBrokerList.

If Capital is the lifeblood of real estate, then Land is its beating heart. Land is at the core of real estate. It is the foundation of the clichéd saying “location, location, location.” In highly dense metropolises like New York and London, raw land regularly achieves astronomical values north of $1,000/SF ($43.56 million per acre). Why then is land so hard to finance? Why is such a crucial part of the real estate industry such a difficult piece of the financing equation? The answer is a mix of government regulation and the inherently speculative nature of land.

Land, Basel III, and HVCRE

The Great Recession and its fallout led to a number of major banking reforms, including Basel III. Basel III established voluntary regulations for the global banking industry, putting a focus on stress tests, assessment of market risk and adequacy of capital at banking institutions around the globe. Most of the major countries around the world have implemented these reforms. One of the more contentious Basel III regulations in the U.S. – and the one most directly tied to financing land – is what is known as High-Volatility Commercial Real Estate (HVCRE). It is the bane of many banks. In a nutshell, it makes financing land and construction projects more difficult for banks across the board. In particular, it doesn’t allow for a piece of land’s increased value over time to be contributed to a development project as equity, regardless of how long the land has been owned. This obviously has caused major issues for banks and developers over the past few years. There is a bill underway in Congress that seeks to loosen up the HVCRE language. The odds look good for the bill to pass, but for the time being the banking industry is operating under the current HVCRE guidelines.

Analyzing the Value of Land Pre-Development

Putting government regulations aside, it is fair to say that land – and what will ultimately be built upon it – is a speculative proposition. Whatever you plan to build on your land does not exist there today. You have to build it first. The market needs to remain stable while you do so. You need to build your building on budget, and the demand for your building, once it is built, needs to be there as planned. Valuing land, whether for a bank or for a joint-venture partnership, is, therefore, an exercise in demand and supply forecasting and cost estimation. I am intimately familiar with this analysis. My first job in the industry was performing residual land value analysis for development sites in major European cities (in fact, I had to learn how to do this analysis in a foreign language – Russian – but that is a whole separate story). The point of the analysis was to back into the value of a development site based on i) what you could build on that site, ii) the demand for that type of building and iii) how much it would cost to build. It’s fascinating to think through, and also highly theoretical. The market is just as much of a factor – if not more – in dictating how much the site is worth. Like most things in business, the valuation and sales prices for development sites are as much an art as a science.

The Landscape of Land & Development Financing

Having said all that, land is a vital part of real estate and how projects get financed. I have become acquainted with land and development financing over the past few years. The landscape (no pun intended) has changed since we came out of the Great Recession. At our firm, we like to joke that land is now a dirty word within the banking industry. I’ve financed a few projects where land contributions have been the primary equity contribution to the development projects. In a couple of instances, a large amount of land – grossed up to today’s value –  served as both the equity and the collateral for the construction loan, such that no cash equity was required for the development. Given the banking landscape today, these were of course extremely difficult deals to structure. It takes creativity and a keen understanding of the industry to structure these deals in a manner suitable for lenders.

Having said all that, land is a vital part of real estate and how projects get financed. Click To Tweet

To discuss your next development project, you can reach Justin Laub, Senior Director, at jlaub@metcapital.com. Or visit the Metropolitan Capital Advisors website at http://metcapital.com.

The author, Justin Laub, is a Senior Director in the Dallas office of Metropolitan Capital Advisors.

The post Capital is the Lifeblood of CRE, But Land is the Beating Heart appeared first on Metropolitan Capital Advisors.

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[m-n-a-critique]

Vijaya Bank to raise Rs1,300 crore via bonds in FY18

#VijayaBank to raise Rs1,300 crore via bonds in FY18

Public sector lender Vijaya Bank said on Sunday that its board has approved raising Rs1,300 crore via bonds in the current fiscal under the Basel III global capital adequacy norms.

The board has accorded its approval for raising Rs1,300 crore by way of additional tier 1 bonds under Basel III for the financial year 2017-18 (revised additional capital requirements amounting to Rs1,000 crore in…

[mylucky137276]

BOI, United Bank to raise up to Rs 1,500 crore via bonds

Banks are tapping the bond market to shore up capital adequacy under Basel-III norms ahead of the end of the financial year second quarter in two weeks.

Two public sector lenders, United Bank of India and Bank of India (BOI), are raising up to Rs 1,500 crore through tier-I and tier-II bonds. Kolkata-based United Bank of India is raising up to Rs 1,000 crore through the bonds (Rs 500 crore in each tier). Bank of India is raising up to Rs 500 crore via Tier-I bonds.

Both banks are facing elevated pressure on asset quality and profitability. They have to set aside higher amounts as provision for bad loans, as growth in interest income tapers due to tepid credit demand. CRISIL has assigned “BBB+” rating to United Bank’s Rs 500-crore Tier-I bonds and “AA-/Negative” rating to the Tier-II bonds. The outlook on both the instruments is negative on account of weakness in the bank’s asset quality and profitability.

The ratings continue to reflect strong expectation of support from the Government of India, the majority stakeholder. Ratings for United Bank also factor in healthy resource profile. Its current and savings account deposits (CASA), as a proportion of overall deposits, reached a high of 47.8 per cent as on June 30, 2017, from 43.3 per cent a year before, CRISIL said. The lender’s gross non-performing assets (NPAs) remained elevated at 17.17 per cent in June 2017 (14.29 per cent as on June 2016), which is in line with the industry trend.

United Bank’s capital adequacy ratio (CAR) stood at 10.35 per cent with Tier-I capital of 8.54 per cent as on June 30, 2017. India Ratings has assigned “A+” rating for Bank of India’s Tier-I bonds (Rs 500 crore). The rating on BOI’s bonds is supported by the bank’s stand-alone credit profile, along with its ability to service coupons and manage principal write-down risk over the Basel-III transition period. BOI’s asset quality has been under pressure since FY16, in line with that of most PSBs. BoI reported a loss in FY17.

[lovacedon]

Silkbank gets SBP?s nod to issue Rs2bln TFC

KARACHI: Silkbank has secured central bank’s nod and will soon be issuing Rs2.0 billion worth of term finance certificates (TFCs) for complying with the capital adequacy ratio (CAR) requirement, a bourse filing said.

The State Bank of Pakistan (SBP) has granted final approval to the bank for issuance of rated, privately placed, unsecured and subordinated TFCs of Rs2.0 billion inclusive of green shoe option of up to Rs500 million subject to the compliance with relevant laws, rules and regulations.

The TFC issue will contribute towards the Silkbank's Tier-II capital for complying with the CAR requirement prescribed by the SBP under its Basel-III framework, and the funds so raised will be utilised towards the bank's business operations.

  Silkbank gets SBP?s nod to issue Rs2bln TFC

[forextutor-blog]

New Post has been published on Forex Blog | Free Forex Tips | Forex News

!!! CLICK HERE TO READ MORE !!! http://www.forextutor.net/full-text-of-the-g20-statement-from-baden-baden/

Full text of the G20 statement from Baden-Baden

The full G20 communique released on March 18, 2017 from Baden-Baden, Germany

G20 Finance Ministers and Central Bank Governors March 18, 2017, Baden Baden

We met at a time when the global economic recovery is progressing. But the pace of growth is still weaker than desirable and downside risks for the global economy remain. We reaffirm our commitment to international economic and financial cooperation. We reiterate our determination to use all policy tools – monetary, fiscal and structural – individually and collectively to achieve our goal of strong, sustainable, balanced and inclusive growth, while enhancing economic and financial resilience. Monetary policy will continue to support economic activity and ensure price stability, consistent with central banks’ mandate, but monetary policy alone cannot lead to balanced growth. Fiscal policy should be used flexibly and be growth-friendly, prioritise high- quality investment, and support reforms that would provide opportunities and promote inclusiveness, while ensuring debt as a share of GDP is on a sustainable path. We emphasise that our structural reform and fiscal strategies are important components to supporting our common growth objectives and will continue to explore policy options tailored to country circumstances in line with the Enhanced Structural Reform Agenda. We reiterate that excess volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability. We will consult closely on exchange markets. We reaffirm our previous exchange rate commitments, including that we will refrain from competitive devaluations and we will not target our exchange rates for competitive purposes. We will carefully calibrate and clearly communicate our macroeconomic and structural policy actions to reduce policy uncertainty, minimise negative spillovers and promote transparency. We are working to strengthen the contribution of trade to our economies. We will strive to reduce excessive global imbalances, promote greater inclusiveness and fairness and reduce inequality in our pursuit of economic growth. We agree on a set of principles to foster economic resilience which provides an indicative menu to be considered in the update of G20 countries growth strategies under the Hamburg Action Plan. We take note of the work on inclusive growth within the Framework Working Group.

We will deepen as well as broaden international economic and financial cooperation with African countries to foster sustainable and inclusive growth in line with the African Union’s (AU) Agenda 2063. We launched the initiative “Compact with Africa” aimed at fostering private investment including in infrastructure. The initiative is demand-driven and respects country-specific circumstances and priorities. The initiative provides modules of good practices and instruments that could be applied in tailor-made investment compacts being implemented through the commitment of multiple stakeholders, such as individual African countries, International Financial Institutions (IFIs) and bilateral partners. We welcome the report by the African Development Bank (AfDB), International Monetary Fund (IMF) and World Bank Group (WBG) and other contributors for the Compact. We support the intention of Côte d’Ivoire, Morocco, Rwanda, Senegal, Tunisia, the AfDB, IMF and WBG, and interested bilateral partners to work on investment compacts and develop strong investment climates. We encourage the private sector to take advantage of the investment opportunities provided and invite other African countries, IOs and interested bilateral partners to join the investment compacts. We will support continuity of this work and its coherence with other initiatives.

We remain committed to further strengthening the international financial architecture and the global financial safety net with a strong, quota-based and adequately resourced IMF at its centre. We support the efforts by the IMF to further enhance the effectiveness of its lending toolkit in line with its mandate, including possible new instruments. We are working towards the completion of the 15th General Review of Quotas, including a new quota formula by the Spring Meetings of 2019 and no later than the Annual Meetings of 2019. We continue with our efforts to achieve a more effective cooperation between the IMF and regional financing arrangements, respecting their mandates. With a view to ensuring debt sustainability, we welcome Operational Guidelines for Sustainable Financing reflecting responsibilities of borrowers and lenders. The Compass for GDP- linked Bonds provides an overview of important aspects of this instrument. Given scarce public resources and the key role of the private sector for sustainable economic development, we welcome the work by Multilateral Development Banks (MDBs) on mobilising private capital. We call on MDBs to finalise Joint Principles by our next meeting and develop Ambitions on Crowding-in Private Finance by the Leaders Summit in July 2017. We look forward to the joint MDBs’ reports on the implementation of the MDBs Balance Sheet Optimisation Action Plan, the MDBs’ Joint Declaration of Aspirations on Actions to support Infrastructure Investment and an update on the Global Infrastructure Connectivity Alliance by the time of the Leaders Summit in July 2017. We invite the MDBs to take further measures in support of these initiatives. We welcome the Principles for Effective Coordination between the IMF and MDBs in case of Countries requesting Financing while facing Macroeconomic Vulnerabilities. We welcome the International Development Association (IDA18) replenishment that, among other goals, will double support to fragile states and emphasise private sector development.

We recognise the importance and benefits of open capital markets and of improving the system underpinning international capital flows while continuing to enhance the monitoring of capital flows and management of risks stemming from excessive capital flow volatility. To support this goal, we look forward to the IMF’s and other IFIs’ further work in this area, including on macroprudential policies. A number of non-OECD G20 members have declared their intention to join the OECD Code of Liberalisation of Capital Movements starting already the process of adherence this year. We welcome the current review of the Code, including work on appropriate flexibility, while maintaining the Code’s current strength and broad scope. Those G20 countries that have not yet adhered to the Code are encouraged to participate voluntarily in the current review and to consider adhering to the Code, taking into consideration country-specific circumstances.

An open and resilient financial system is crucial to supporting sustainable growth and development. To this end, we reiterate our commitment to support the timely, full and consistent implementation and finalisation of the agreed G20 financial sector reform agenda. We endorse the Financial Stability Board (FSB) policy recommendations to address structural vulnerabilities from asset management activities, ask the International Organization of Securities Commissions (IOSCO) to develop concrete measures for their timely operationalisation and ask the FSB to report on the progress of this work by the Leaders Summit in July 2017. We will continue to closely monitor, and if necessary, address emerging risks, in particular those that are systemic, and vulnerabilities in the financial system, including those associated with shadow banking or other market-based finance activities. We ask the FSB to present by the Leaders Summit in July 2017 its assessment of the adequacy of the monitoring and policy tools available to address such risks from shadow banking and whether there is need for any further policy attention. We also look forward to the FSB’s comprehensive review of the implementation and effects of the reforms to over-the- counter (OTC) derivatives markets and call on G20 members to complete the full, timely and consistent implementation of the OTC derivatives reforms where they have not already done so. We welcome the progress by the Committee on Payments and Market Infrastructures (CPMI), IOSCO and FSB towards developing guidance to enhance the resilience, recovery and resolvability of Central Counterparties (CCPs) and look forward to their publication by the time of the Leaders Summit in July 2017 as well as plans for any follow-on work as needed. We confirm our support for the Basel Committee on Banking Supervision’s (BCBS) work to finalise the Basel III framework without further significantly increasing overall capital requirements across the banking sector, while promoting a level playing field. We reiterate the importance of progress under the work plan to address misconduct risks in the financial sector and look forward to the report from the FSB by the time of the Leaders Summit in July 2017. We will continue to enhance our monitoring of implementation and effects of reforms to ensure their consistency with our overall objectives, including by addressing any material unintended consequences. We look forward to the FSB’s third annual report. We also welcome the FSB work to develop a structured framework for the post-implementation evaluation of the effects of the G20 financial regulatory reforms and we look forward to the framework, after an early public consultation of its main elements, being presented by the time of the Leaders Summit in July 2017 and published. We welcome the OECD Methodology for Assessing the Implementation of the G20/OECD Principles of Corporate Governance.

To ensure that we will reap the benefits and opportunities that digital innovation offers, while potential risks are appropriately managed, we encourage all countries to closely monitor developments in digital finance, including consideration of cross-border issues, both in their own jurisdictions and in cooperation with the FSB and other international organisations and standard setting bodies. We welcome the FSB work on the identification, from a financial stability perspective, of key regulatory issues associated with technologically enabled financial innovation (FinTech).

The malicious use of Information and Communication Technologies (ICT) could disrupt financial services crucial to both national and international financial systems, undermine security and confidence and endanger financial stability. We will promote the resilience of financial services and institutions in G20 jurisdictions against the malicious use of ICT, including from countries outside the G20. With the aim of enhancing our cross-border cooperation, we ask the FSB, as a first step, to perform a stock-taking of existing relevant released regulations and supervisory practices in our jurisdictions, as well as of existing international guidance, including to identify effective practices. The FSB should inform about the progress of this work by the Leaders Summit in July 2017 and deliver a stock-take report by October 2017.

We support the work of the Global Partnership for Financial Inclusion (GPFI) to advance financial inclusion, especially of vulnerable groups, and Small and Medium-sized Enterprises’ (SMEs) participation in sustainable global value chains. We encourage an adequate coverage of opportunities and challenges of digital financial inclusion in the updated G20 Financial Inclusion Action Plan. We encourage G20 and non-G20 countries to take steps to implement the G20 High- Level Principles for Digital Financial Inclusion. We emphasise the importance of enhancing financial literacy and consumer protection given the sophistication of financial markets and increased access to financial products in a digital world and welcome related OECD/INFE work. We welcome the progress made on the implementation of the G20 Action Plan on SME Financing and commit to further significant progress in improving the environment for SME Financing while continuing to encourage non-G20 countries to join this effort.

We will continue our work for a globally fair and modern international tax system. We remain committed to a timely, consistent and widespread implementation of the Base Erosion and Profit Shifting (BEPS) package, welcome the growing membership of the Inclusive Framework on BEPS and encourage all relevant and interested countries and jurisdictions to join. We ask the OECD to report back on the progress of BEPS implementation, including on all the four minimum standards, by the Leaders Summit in July 2017. We look forward to the first signing round on 7 June 2017 of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS and to the first automatic exchange of financial account information under the OECD Common Reporting Standard (CRS), which will commence in September 2017. We call on all jurisdictions to sign and ratify the multilateral Convention on Mutual Administrative Assistance in Tax Matters and urge all relevant jurisdictions including financial centres which have not yet done so to commit without delay to implementing the CRS and to take all necessary actions, including putting in place domestic legislation, in order to start exchanges under the CRS at the latest by September 2018. Furthermore, we look forward to the OECD’s preparation of a list by the Leaders Summit in July 2017 of those jurisdictions that have not yet sufficiently progressed towards a satisfactory level of implementation of the agreed international standards on tax transparency. Defensive measures will be considered against listed jurisdictions. We continue to support targeted assistance to developing countries in building their tax capacity, following in particular the principles of the Addis Tax Initiative, and support the work of the Platform for Collaboration on Tax, which will deliver a progress update by mid-2017.

We welcome the international cooperation on pro-growth tax policies and the work on tax and inclusive growth and tax certainty conducted by the OECD and the IMF. We acknowledge the report on Tax Certainty submitted to us and encourage jurisdictions to consider voluntarily the practical tools for enhanced tax certainty as proposed in that report, including with respect to dispute prevention and dispute resolution to be implemented within domestic legal frameworks and international tax treaties. We ask the OECD and the IMF to assess progress in enhancing tax certainty in 2018. As part of the BEPS project, we have undertaken a discussion on the implications of digitalisation for taxation in the OECD Task Force on the Digital Economy (TFDE). We will further work on this issue through the TFDE and ask for an interim report by the IMF and WBG Spring Meetings 2018.

As an important tool in our fight against corruption, tax evasion, terrorist financing and money laundering, we will advance transparency of legal persons and legal arrangements via the effective implementation of international standards and the availability of beneficial ownership information in the domestic and cross-border context. In this regard, we welcome the work by the Financial Action Task Force (FATF) and the Global Forum on Transparency and Exchange of Information for Tax Purposes. We look forward to a progress report from the OECD on its work in complementary tax areas relating to beneficial ownership by the time of the Leaders Summit in July 2017.

We welcome the progress report and the 2017 work plan under the FSB-coordinated action plan to assess and address the decline in correspondent banking, so as to support remittances, financial inclusion, trade and openness. We welcome the publication of Guidance on Correspondent Banking Services by the FATF which will also support the provision of remittance services. We look forward to further work towards clarifying regulatory expectations, as appropriate. To further improve the environment for remittances, we support progress made by the GPFI with regard to facilitating remittances, including by promoting actions and policies that could lower their costs. We look forward to an update of National Remittances Plans by the end of 2017. Furthermore, we welcome joint efforts of FATF, FSB and GPFI to clarify in a dialogue with the private sector any specific issues relating to remittance providers, including their access to banking services, and report back to us on it by July 2017. We also ask all relevant stakeholders, including IOs, to continue to support countries in building domestic capacity to improve the supervisory environment for remittances and correspondent banking, notably through technical assistance.

We reaffirm our commitment to tackle all sources, techniques and channels of terrorist financing and our call for swift and effective implementation of the FATF standards worldwide. We welcome and support the ongoing work to strengthen the institutional basis, governance and capacity of the FATF and ask the FATF for an update on the work by the FATF members by the Leaders Summit in July 2017. We call on all member states to ensure that the FATF has the necessary resources and support to effectively fulfil its mandate.

We reaffirm our commitment to rationalise and phase out, over the medium term, inefficient fossil fuel subsidies that encourage wasteful consumption, recognising the need to support the poor. Furthermore, we encourage all G20 countries which have not yet done so, to initiate as soon as feasible a peer review of inefficient fossil fuel subsidies that encourage wasteful consumption.

We welcome the recommendations of the Inter Agency Group on Economic and Financial Statistics (IAG) for sharing and accessibility of granular data. We look forward to the joint report of the FSB and IMF on the overall progress of the Data Gaps Initiative by our meeting in Washington, D.C. in October 2017. We also welcome the work of the IMF in consultation with the FSB and the Bank for International Settlements (BIS) to promote information sharing by compiling a publicly available macroprudential policy database, building on the IMF’s existing infrastructure.

Source: Germany’s Federal Ministry of Finance

Compare it to the September statement and the big thing that stands out is the missing line “we will resist all forms of protectionism.” Full text of the G20 statement from Baden-Baden Full text of the G20 statement from Baden-Baden http://www.forexlive.com/feed/news $inline_image