Financial markets - Organisation for Economic Co-operation and Development

Financial Markets and International Financial Architecture

The G20 attaches great importance to the role of the financial sector in ensuring sustainable economic development and the stability of financial markets. The OECD supports this ambition by contributing to the G20 discussion on capital flows, including by promoting further the relevance of the OECD Code of Liberalisation of Capital Movements for all G20 members in the G20 International Financial Architecture Working Group. Furthermore, the OECD has supported the G20 emphasis on promoting small and medium-sized enterprise (SME) development, including access to finance, participation in GVCs, corporate governance and taxation rules. The G20 adopted the G20/OECD High Level Principles on SME financing and G20/OECD Principles of Corporate Governance.

In 2020, with the COVID-19 crisis hitting developing countries with particular force, the G20 launched the Debt Service Suspension Initiative (DSSI), extended to 2021. The G20 expressed readiness to go beyond suspension by affording debt treatment for DSSI-eligible countries (Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative - DSSI). In support of the G20’s efforts to advance debt transparency and sustainability, the OECD is moving towards hosting the data repository of the Institute of International Finance (IIF)’s Voluntary Principles of Debt Transparency. The OECD is also continuously supporting the G20 in following and analyzing capital movements and corresponding country measures, observed since the onset of the COVID-19 crisis.

International Financial Architecture

The Code of Liberalisation of Capital Movements (the Code) was adopted in the OECD in 1961 at a time when many OECD countries were in the process of economic recovery and when the international movement of capital faced many barriers.

Today, all 37 OECD countries and an increasing number of G20 members (since 2012, this instrument is open for adherence by non-OECD countries) adhere to the Code, which has been revised in 2019. In March 2017, G20 Finance Ministers and Central Bank Governors made a call for non-adherents to consider joining the Code. Since then three additional G20 members have requested adherence to the Code and their adherence process has started.

In 2016, adhering countries adopted terms of reference for a review of the Code with a view to strengthening it and ensuring its continued relevance. The OECD regularly updates the G20 on the review of the Code.

Recent OECD Contributions to the G20

Financial Consumer Protection and Financial Education

The OECD plays a leading role in developing guidelines for policy makers on financial consumer protection and financial education, which are critical in supporting meaningful, safe financial inclusion that contributes to inclusive growth. The OECD coordinates the G20/OECD Task Force on Financial Consumer Protection and the OECD International Network on Financial Education develops policy tools and research on financial literacy. The OECD is an implementing partner of the Global Partnership for Financial Inclusion (GPFI) and its subgroup on Financial Consumer Protection and Financial Literacy.

Following endorsement of the G20 High-level Principles on Financial Consumer Protection in 2011, the G20/OECD Task Force on Financial Consumer Protection is supporting the implementation of the G20 High-level Principles. In July 2012, the Principles were adopted by the OECD Council as a Recommendation, thereby expanding the coverage of the principles to include all OECD member countries.

Financial education is now universally recognised as a core component of the financial empowerment of individuals and the overall stability of the financial system. In 2016, G20 Leaders endorsed the High-Level Principles for Digital Financial Inclusion to highlight the need to strengthen financial and digital literacy as an important component of the international policy agenda. OECD International Network on Financial Education (INFE) has been supporting the implementation of this High-Level Principle by preparing reports, especially considering the impact of the increasingly digitalised economy.

OECD/INFE is also committed to supporting women’s financial empowerment and the related G20 agenda by providing policy evidence, analysis, and guidance to help policy makers address women’s needs for financial awareness and education.

In support of the Argentinian presidency’s financial inclusion agenda as well as the implementation of the High-Level Principles for Digital Financial Inclusion, the G20/OECD Task Force produced a Policy Guidance Note on Financial Consumer Protection Approaches in the Digital Age and the OECD/INFE a Policy Guidance Note on Digitalisation and Financial Literacy. Under the Japanese Presidency, G20 Leaders welcomed the Fukuoka Policy Priorities on Financial Inclusion and Ageing, prepared by the OECD with inputs from a range of other partners. Contributions on this stream of work continued under the Saudi Presidency, who delivered High-Level Policy Guidelines (HLPGs) on Digital Financial Inclusion for Youth, Women, and SMEs with the purpose to identify policy approaches to reduce the gap in financial inclusion. The HLPGs were supported by key reports, including two reports from the World Bank on the financial inclusion gap for women and SMEs, respectively, and the report Advancing the Digital Financial Inclusion of Youthfrom the OECD. The work on financial inclusion is continuing with the Italian G20 Presidency 2021. Under the Italian Presidency, the OECD produced three reports: Navigating the Storm: MSMEs’ Financial and Digital Competencies in COVID-19 times; Supporting Financial Resilience and Transformation through Digital Financial Literacy; and Financial Consumer Protection and Financial Inclusion in the Context of COVID-19. The latter two reports informed the development of the G20 Menu of Policy Options for Digital Financial Literacy and Financial Consumer and MSME Protection. The work on financial inclusion is continuing with the Indonesian G20 Presidency 2022.