"Very important area": Nirmala Sitharaman on strengthening of global financial architecture, next steps

Washington [US], April 14 : Describing the Global Financial Architecture as a "very important area", Union Finance Minister Nirmala Sitharaman said that through India's G20 Presidency, several sessions will be taking place to get into the details on how we want to look at the financial architecture itself.

She underlined that there have been a lot of discussions going on regarding what should be the next steps to strengthen the global financial architecture.

Responding to the media queries on the margins of the 2nd G20 finance ministers and central bank governors' meetings in Washington on Thursday (local time) on the next steps on International Financial Architectural reform which is also one of the themes of India's G20 Presidency, Sitharaman said, "That is a very important area. In fact, there have been a lot of discussions, getting into details on how the global financial architecture should be strengthened and what are the next steps and so on. Through the India presidency, we will be having several sessions to get into the details of how we want to look at the financial architecture itself."

On the Multilateral Development Banks (MDBs), the Finance Minister said, "If I may add, the expert group which is looking at the MDBs (Multilateral Development Bank) reforms, is also actively looking at the reforms and actively progressing in this direction. They had one meeting after the terms of reference were agreed upon by the G20 members. they are now here also sitting together with diff members getting their input."

At this point, I can now identify the following steps, but I believe it will be decided once the conversations take place here and we come up with a formulation on how to go, Sitharaman added.

Addressing the press briefing, the Union Finance Minister talked about the ongoing meetings in the US. She said that it is the second of the G20 finance ministers and central bank governors' meetings under the Indian Presidency which is held at the margin of the 2023 spring meetings of the International Monetary Fund (IMF) and the World Bank group.

She stated that the meeting saw the participation of around 350 delegates and various international and regional orgsations. The governor of the Indian central bank Reserve Bank of India (RBI) co-chaired it with Sitharaman.

During the presser, Ajay Seth, the Economic Affairs Secretary of the Ministry of Finance said there is a process where World Bank has made major progress and other MDBs are also looking into this.

"On one side, there is traditional development agenda which is sustainable development goals, and there is an unfinished poverty agenda settled in a larger number of LICs. At the same time, there are new challenges, which are 21st-century challenges around climate action issues are there," Ajay Seth asserted.

Talking further, the Economic Affairs Secretary also laid emphasis on the capital adequacy framework (CAF) in all MDBs and said, "All that needs to be taken forward. it is a good first step which has been met. thereafter there is an active discussion going around the capital adequacy framework (CAF) in all MDBs that ministers endorsed last year. I will say not almost all, all MDBs are working towards the CAF implementation."

Day 1 of the second G20 Finance Ministers and Central Bank Governors (FMCBG) meeting under the Indian presidency witnessed Session 1 on Global Economy and International Financial Architecture held in Washington on Thursday (local time) under the ambit of Spring Meetings 2023 of the International Monetary Fund (IMF) and World Bank (WB).

The FMCBG meeting also discussed key challenges to the Global Economic Outlook and explored possible areas of policy coordination on pressing global issues, besides exchanging views on accelerating progress on deliverables envisioned during G20India Presidency.

Sitharaman discussed the progress on the agenda of strengthening multilateral development banks (MDBs) including hearing from MDBs on the implementation of recommendations of the Capital Adequacy Framework Review Panel and sought G20 member's views on the way forward of the expert group on strengthening MDBs set up by G20 India Presidency, according to the finance ministry.

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