Restoring the essence of finance – The F20 Initiative

Global development has entered a critical stage. The most pressing issues include reviewing and rebuilding the basis of the value of human society, restoring the essence of finance to serve the real economy, and reshaping and improving the basic economic system, ultimately to boost economic recovery and comprehensive and sustainable development.

The International Finance Forum (IFF) is an independent, non-profit and non-governmental international organisation. It was founded in Beijing in October 2003 by global financial leaders, policymakers, leading scholars and experts from more than 20 states and regions – including China, the US and the European Union – and international organisations such as the UN. The IFF is a long-standing high-level dialogue platform and communications and research network in the financial realm. It aims to safeguard and improve international financial order through non-governmental, high-level dialogues featuring multilateral, equal, practical and constructive co-operation to enhance world economic inclusiveness and comprehensive and sustainable development. The IFF is committed to becoming an independent, transparent and non-governmental think tank that focuses on international financial public diplomacy and strategies.

To tackle the world’s new order, circumstances and challenges, and to promote global stability and co-operative dialogues – as set out at the 2016 Group of 20 summit in Hangzhou – all members of the IFF approved its upgrade to ‘F20’ in the global financial sphere. This decision was based on the IFF’s well-developed framework built up over the past 15 years. 

The F20 Initiative aims to usher in a New era of comprehensive and sustainable development – New capital, new value, new world. The IFF, therefore, proposes the following 11 points of action to better equip the F20 Initiative to reshape the world economic system:

1. Establishing the F20 global network. The F20 global network will be established by reorganising the IFF Global Board and the executive body, setting up an open and interconnected global network centred on G20 countries and regions – with the participation of emerging economies and countries involved in the Belt and Road Initiative (BRI) – and building the IFF into the F20, a global financial organisation.

2. Restoring the essence of finance. The F20 will fulfil its role as a global network platform by restoring the essence of finance – to serve the real economy – by improving the basic economic system, ultimately accelerating global recovery and bolstering the comprehensive and sustainable development of the world. This will develop completely the fundamental function of financial instruments, and promote comprehensive, sound and sustainable development of the basic economy and human civilisation.

3. Providing new drivers to global governance. This will be acheived through the F20 dialogues, by supporting the role of the G20 as a major international economic forum to strengthen co-operation on macroeconomic policies, reinvigorating global trade and investment, accelerating reform of the international financial system and enhancing studies on the world financial order, global financial governance frameworks, financial stability and relations between finance and world peace.

4. Facilitating national and regional financial co-operation dialogues. The IFF platform will facilitate financial co-operation dialogues through regular F20 summits and meetings on national and regional financial co-operation, the sharing of ideas and experiences of development among all member countries, furthering profound discussion relating to the G20 and international development issues, promoting the implementation of G20 summit decisions and striving to develop
the F20 Initiative into a strong complement to the G20, as well as making it an authoritative platform for comprehensive dialogues, exchanges and co-operation in areas such as international economy, finance and public relations.

5. Ensuring China and emerging economies fulfil their roles. Partici-pation by China and other emerging economies will be encouraged by facilitating dialogues on national and regional stability and co-
operation, and encouraging financial and economic co-operation among major powers. This will also be achieved through the F20’s studies on the new drivers and challenges of the G20, promotion of supply-side structural reforms, restructuring the economy, optimising resource allocation, upgrading the quality and quantity of economic growth, and invigorating emerging economies. Finally, supporting the internationalisation of Chinese enterprises to export China’s capital and technologies to developing countries through direct investment will achieve mutual benefits and win-win results.

6. Establishing a global green financial system. Encouraging governments around the world to incorporate green finance into their national strategies, promoting comprehensive, sustainable and green growth, strengthening laws and regulations on green finance, promoting green investment and economy, establishing a guarantee mechanism for green projects, developing the green financial market and encouraging inflow of private capital by developing diversified financial instruments will all aid the establishment of a global green financial system.

7. Promoting inclusive finance development. Inclusive finance development will be promoted by enhancing internationalisation, global co-operation and financing for small and medium-sized enterprises, promoting balanced development in the economic and social sectors, encouraging all nations to upgrade social welfare and social security, reduce poverty, protect the poor and vulnerable, and provide more secure, convenient and safe financial services to the general public, and facilitating world peace, social stability and improving people’s lives.

8. Boosting growth through financial innovation. The core of financial innovation lies in utilising technology to perform the fundamental function of finance – to boost the real economy’s development. Growth will also be aided via strengthening governance and regulation over the digital economy and finance, emphasising supervision over the potential benefits and risks of e-commerce, enhancing the inclusion of areas such as digital revolution and blockchain technologies, and establishing a fair and effective regulatory mechanism and framework.

9. Promoting the BRI and the Silk Road Action Plan. The BRI has been promoted in the establishment of the Silk Road International Association (SRIA) and SRIA summits. The BRI will be further promoted by creating a development blueprint that involves the international community, global market and private capital to provide new engines for co-operation on the BRI, promoting regional co-operation, constructing win-win and multi-win landscapes, building a common interest community and facilitating world peace, inclusion and sustainable development.

10. Establishing the IFF Institute. The IFF Institute will be established through the IFF international academic network mechanism, to carry out profound, collaborative research on major financial issues. Discussing and putting forward proposals on promoting co-operation, enhancing the reform of the global financial system and the diversification of international currencies, establishing a fair, inclusive and orderly international financial system, and publishing high-level, forward-looking and instructive academic reports have also contributed.

11. Establishing the IFF Academy. A comprehensive, cross-disciplinary education institution with global influence that integrates financial training, innovation and practices has been established. It strives to cultivate qualified and multi-skilled personnel in the financial field, and equip them with innovative ideas, new knowledge and skills that meet global requirements, They will be a leading force in the field of new capital, with  abundant practical experience and overall strategic vision. The institution aims to be a prominent global financial educator, as well as a platform for cultivating high-potential talent via the promotion of global exchange, collaboration and development of international finance. 

The IFF firmly believes that, by continuing to develop alongside the F20 global network, the essence of finance can be restored to serve the real economy, reshape and improve the basic economic system, and ultimately accelerate global economic recovery and bolster the comprehensive and sustainable development of the world economy.

This article is part of The IFF China Report 2018, which draws mainly on content provided by China-headquartered think tank, the International Finance Forum, and is published in association with Central Banking.