No.24/157/DKom
With the vision of recover together, Indonesia as G20 President reiterated the importance of strengthening the resilience and architecture of the international financial system, especially amid escalating global risk. That was the key takeaway of the hybrid 4th International Financial Architecture Working Group (IFAWG) organised under the auspices of Indonesia's G20 Presidency and represented by Bank Indonesia and the Ministry of Finance on 16-17th June 2022 in Bali.
Spanning four sessions, IFAWG discussed the themes of Promoting Development Financing, MDBs Capital Adequacy Framework, Strengthening Financial Resilience, Promoting Diversified Currency in Trade and Finance, as well as Strengthening Monitoring of Capital Flows. IFAWG is a G20 working group focused on strengthening the global financial system, including support for low-income and vulnerable countries.
In general, the members of the G20 affirmed their commitment to strengthening the international financial system to support economic recovery amid global economic dynamics, including current geopolitical conditions that have far-reaching implications on surging commodity and energy prices as well as tighter global liquidity. In addition, the G20 discussed efforts to strengthen support for low-income and vulnerable countries, particularly in terms of overcoming the pandemic as well as recovering a sustainable and inclusive economy. Towards that end, G20 members encouraged cooperation and synergy between development partners (Multilateral Development Banks – MDBs) and international financial organisations, such as the World Bank, Asian Development Bank, IMF and OECD, to safeguard global economic resilience and complementarity among various programs and policy recommendations targeting countries in need.
The latest event was the fourth in a series of five IFAWG meetings planned for 2022 under Indonesia's G20 Presidency. The outcome of the discussions will be communicated to the G20 finance ministers and central bank governors for further direction at the FMCBG meeting planned for 15-16th July 2022 in Bali.
In addition to the working group meeting, a seminar on Central Bank Digital Currency (CBDC) was also held to discuss the macrofinancial opportunities and challenges as well as international monetary system implications related to CBDC. Entitled ‘The Macrofinancial Implications of CBDC’, the seminar welcomed speakers from central banks, international organisations and academia to discuss the optimal policy response and design options to maximise the benefits of CBDC. The seminar intended to broaden understanding among G20 members concerning technological change (TC) in the financial sector, CBDC in particular, as well as the implications that demand the attention of the authorities, including monetary policy effectiveness, contagion and also capital flows. The discussions paved the way for the 5th IFAWG meeting in September, which will explore CBDC in greater detail.
Jakarta, 17th June 2022
Head of Communication Department
Erwin Haryono
Executive Director
Information on Bank Indonesia
Tel. 021-131, email: bicara@bi.go.id
