EFSD experts present their proposals on the functioning of international financial architecture within the G20 expert track

18 May 2023

Moscow, May 18, 2023.

An important part of the G20 process is dialogue with the expert community. One of the most active dialogue formats is the Expert Twenty (T20). T20 is the official group for the G20, bringing together leading think tanks around the world. It serves as the G20's "ideas bank" and aims to provide policy advice to G20 leaders.

In 2023, under the Indian Presidency, EFSD experts prepared an expert opinion on the functioning of the global financial architecture. In their commentary “Addressing the uneven geographical coverage of the Global Financial Safety Net”, which was published on India’s T20 website, the authors noted that for the global recovery from the pandemic, especially for developing countries, it is necessary to strengthen the elements of the Global Financial Safety Net (GFSN).

First, the general taxonomy of stabilisation instruments and resources needs to be defined. in particular, the taxonomy of the MDBs stabilisation financing should be benchmarked towards GFSN instruments. The G20 could review stabilisation financing that is channelled through the non-GFSN institutions, and consider ruling principles for an optimal allocation of resources between GFSN and other mechanisms. This suggestion is particularly relevant in connection to the G20 efforts to enhance MDBs’ capital adequacy frameworks. Second, the geographical coverage of existing RFAs needs to be widened and an RFA for Africa needs to be established.

All in all, to increase resilience, especially for emerging and developing economies, the authors suggest further strengthening of GFSN. This is expedient for effective counteraction to inevitable crises in the future.

Publications of the EFSD experts on the Global Financial Safety Net and other topics are available here.