Panel discussion 1 on specific actions in the first draft of the outcome document on ‘II. F. International financial architecture and systemic issues’

Introductory remarks and moderation

H.E. Ms. Merete Fjeld Brattested, Permanent Representative of Norway to the United Nations

H.E. Mr. Chola Milambo, Permanent Representative of Zambia to the United Nations

Panelists

Ms. Debra-Lee Swanepoel, National Treasury, South Africa

Mr. William Roos, Ministry of the Economy, Finance and Industrial and Digital Sovereignty, France

Ms. Geetu Joshi, Department of Economic Affairs, Ministry of Finance of India

Discussants

Mr. Rémy Rioux, CEO, AFD and President, Finance in Common

Mr. Jose Antonio Ocampo, Professor, Columbia University

Interactive discussion (2-minute time limit)

Background and Guiding Questions

Supporting reform of the international financial architecture (IFA) – the set of international financial frameworks, rules, institutions and markets that safeguard the stability and functions of the global monetary and financial systems – is an explicit mandate of FFD4. Many such reforms have been undertaken since 2020, in response to the series of global shocks and crises. But they have not kept pace with rising needs, changes in the global geopolitical environments and new challenges in the financial system.

The first draft puts forward a set of ambitious proposals for IFA reforms, building on the Pact for the Future. It addresses global governance and contains actions to increase the voice and representation of developing countries in the governance of key institutions at the heart of the global financial safety net — such as the IMF and the World Bank. This is critical to ensuring a fair, transparent, and responsive system that adapts to country-specific needs. To improve crisis prevention, the draft contains actions for a stronger and more efficient global financial safety net, through a stronger role for special drawing rights (SDRs), improvement in IMF facilities and strengthened regional financial arrangements. A well-functioning safety net can enable countries to focus resources on long-term investments needed to achieve the SDGs, rather than on self-insurance or short-term crisis management. Adjustment to financial regulation could also unlock resources by reducing the cost of capital for developing countries, including through recalibrating the pricing of risk, and reducing the mechanistic reliance on credit ratings from private ratings agencies.

Panelists in this session are invited to pay particular attention in their interventions on strengthening the global financial safety net with the IMF at its center and prudential and financial regulation topics. They are invited to address the following questions:

• What should be the main components of a ‘new playbook on SDRs’, which would facilitate more timely decisions on issuance and rechannelling of SDRs, but without requiring changes in SDR rules and the nature and role of SDRs? How can the IMF play a more effective role in the global financial safety net? (actions 47g-j)
• How can we further advance the review of potential miscalibrations in risk-weightings within banking and financial standards? Which fora, bodies, or committees could undertake such a review? (action 49a)
• Regarding credit rating agencies, what can we learn from national experiences in regulation of credit rating agencies and how can they inform the outcome document? (actions 28m, 44a-c, 48a-c)
• How would the annual special high-level meeting under the auspices of ECOSOC for dialogue with credit rating agencies need to be designed to advance relevant actions in the outcome document and be effective and impactful? (actions 48a)

Programme

Panel discussion 7 on specific actions in the first draft of the outcome document on ‘II.B. Domestic and international private business and finance’

Introductory remarks and moderation

H.E. Ms. Merete Fjeld Brattested, Permanent Representative of Norway to the United Nations

H.E. Mr. Chola Milambo, Permanent Representative of Zambia to the United Nations

Panelists

Mr. Ramon Boone, Ministry of Finance, Belgium

Mr Anthony Swan, Director, Development Finance and Economics, Department of Foreign Affairs and Trade, Australia

Discussants    

Mr. Thomas Beloe, Director, Sustainable Finance Hub, UNDP

Interactive discussion (2-minute time limit)

Background and Guiding Questions

Private business activity, investment, and innovation have acted as significant drivers of sustainable development since the adoption of the Addis Agenda. Nonetheless, global investment growth has decelerated in recent years. Despite increased attention to innovative finance instruments such as blended finance and the growing adoption of sustainable business and finance legislation, investment in sustainable development has fallen short of expectations, nor have companies and investors adequately prioritized sustainable development.

The first draft of the outcome document commits to actions to address key barriers: underdeveloped financial and capital markets in many developing countries; insufficient access to concessional and affordable finance, particularly for women, marginalized groups, and micro, small, and medium-sized enterprises; and the continued misalignment between short-term financial incentives and long-term sustainable development impact. Actions include enhanced capacity support, and adoption of policy frameworks and incentives for sustainable private investment at national and global levels.

Panelists in this session are invited to pay particular attention in their interventions on the proposals on SME and local currency financing, on private capital mobilization for sustainable development impact and standardization of relevant instruments, and on the business case for sustainable business and finance and relevant regulations. They are invited to address the following questions:

• What practical steps can be taken to strengthen domestic financial markets and local economies - including local banks - to expand MSMEs’ access to affordable credit, particularly in developing countries? (action 27g)
• How can the availability of local currency lending be increased to mobilize additional private capital for sustainable development, and what role should MDBs and DFIs play in scaling these efforts, including in improving impact? (action 28l, 31n)
• How can innovative financing mechanisms (e.g. blended finance, impact investment, and thematic bonds) be scaled and made more accessible to investors, to support sustainable development investment? (action 28g)
• How can governments and regulators build the right enabling environments and regulatory frameworks for sustainable business and finance, in alignment with both national development priorities and international standards for cross-border investment? (action 29 d-g)