The Financial Stability Institute of the Bank for International Settlements (BIS), an international financial institution based in Basel, Switzerland, which aids central banks in their pursuit of monetary and financial stability, recently hosted its first Global Partnership for Financial Inclusion (GPFI) Conference with the theme “Promoting financial inclusion through proportionate standards and guidance.” Participants at this event deliberated on the challenges faced by standard-setting bodies in broadening financial inclusion. Among the conference attendees were representatives from five global standard-setting bodies: the Basel Committee on Banking Supervision (BCBS), the Financial Action Task Force (FATF), the Committee on Payment and Settlement Systems (CPSS), the International Association of Deposit Insurers (IADI) and the International Association of Insurance Supervisors (IAIS).
In his opening remarks, Jaime Caruana, General Manager of BIS, noted: “This conference is an opportunity for the standard-setting bodies to deepen their discussions on financial inclusion. There is tremendous value in having these five standard-setting bodies in the same room here to share perspectives on the contributions that each can make to the delivery of sustainable high-quality financial services to entire populations around the world.”
Her Royal Highness, Princess Máxima of the Netherlands, the UN Secretary General’s Special Advocate for Inclusive Finance for Development and Honorary Patron of GPFI, joined voices with representatives of the G20, a group of 19 large economies plus the EU, to call on standard-setting bodies to work in line with their core mandates to ensure financial inclusion for the 2.5 billion people around the world without access to formal financial services. Throughout the conference, it was emphasized that the proportionality principle, i.e. the balancing of risks and benefits against the costs of regulation and supervision, was essential both in developing global standards and guidance relevant to financial inclusion and in implementing policies at country level. This idea is based on simplifying requirements for smaller transactions in order to reduce their cost and increase convenience.
By Chioma Okwudiafor, Research Associate
About the Bank for International Settlements (BIS) The Bank for International Settlements (BIS) has its head office is in Basel, Switzerland, and has two representative offices: in the Hong Kong Special Administrative Region of the People’s Republic of China and in Mexico City. Established on 17 May 1930, BIS is to serve central banks in their pursuit of monetary and financial stability, to foster international cooperation in those areas and to act as a bank for central banks. BIS does not provide financial services to private individuals or corporate entities. Since 2004, the BIS has published its accounts in terms of special drawing rights (SDRs) replacing the gold franc as the bank’s unit of account. As of 31 March 2012, the paid up capital of the bank was SDR 699 million (USD 1.06 billion).
About Global Partnership for Financial Inclusion
Global Partnership for Financial Inclusion (GPFI) is a group intended to carry forward work on financial inclusion, including implementation of the Financial Inclusion Action Plan endorsed at the G20 Summit in South Korea. The G20 are a group of large economies including the EU and 19 Countries.
About Basel Committee on Banking Supervision (BCBS) The Basel Committee on Banking Supervision provides a forum for regular cooperation on banking supervisory matters. Its objective is to enhance understanding of key supervisory issues and improve the quality of banking supervision worldwide. The Committee’s members come from Argentina, Australia, Belgium, Brazil, Canada, China, France, Germany, Hong Kong SAR, India, Indonesia, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, Russia, Saudi Arabia, Singapore, South Africa, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States.
About Financial Action Task Force (FATF)
The Financial Action Task Force (FATF) is an inter-governmental body established in 1989 by the Ministers of its 36 member jurisdictions. The objectives of FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system. The FATF Secretariat is housed at the headquarters of the Organisation for Economic Cooperation and Development (OECD) in Paris, France.
About Committee on Payment and Settlement Systems (CPSS)
The Committee on Payment and Settlement Systems (CPSS) serves as a forum for central banks to monitor and analyse developments in domestic payment, clearing and settlement systems as well as in cross-border and multicurrency settlement schemes. It is based in the Bank for International Settlements headquarters in Basel, Switzerland, has 25 member institutions and meets three times a year.
About the International Association of Deposit Insurers (IADI)
The International Association of Deposit Insurers (IADI) is a nonprofit organization constituted under Swiss Law in 2002 and domiciled at the Bank for International Settlements in Basel, Switzerland. It aims to enhance the effectiveness of deposit insurance systems by promoting guidance and international cooperation. Members of IADI conduct research and produce guidance for the benefit of those countries seeking to establish or improve a deposit insurance system. Members also share their knowledge and expertise through participation in international conferences and other forums. IADI currently represents 65 deposit insurers from 64 jurisdictions.
About International Association of Insurance Supervisors (IAIS)
Established in 1994, IAIS represents insurance regulators and supervisors in nearly 140 countries, constituting a reported 97 percent A of the world’s insurance premiums. Its objectives are to promote effective and globally consistent supervision of the insurance industry in order to develop and maintain fair, safe and stable insurance markets for the benefit and protection of policyholders; and to contribute to global financial stability.
Sources and Additional Resources:
Bank For International Settlements Press Release: “BIS hosts first GPFI Conference on Standard-Setting Bodies and Financial Inclusion” http://www.bis.org/press/p121030.htm
MicroCapital Universe profile: Bank for International Settlements
MicroCapital Universe Profile: Global Partnership for Financial Inclusion http://www.microcapital.org/microfinanceuniverse/tikiindex.phppage=Global+Partnership+for+Financial+Inclusion+%28GPFI%29
MicroCapital Universe Profile: Basel Committee on Banking Supervision (BCBS) http://www.microcapital.org/microfinanceuniverse/tikiindex.phppage=Basel+Committee+on+Banking+Supervision+%28BCBS%29
MicroCapital Universe Profile: Financial Action Task Force (FATF) http://www.microcapital.org/microfinanceuniverse/tikiindex.phppage=Financial+Action+Task+Force+%28FATF%29
MicroCapital Universe Profile: Committee on Payment and Settlement Systems (CPSS) http://www.microcapital.org/microfinanceuniverse/tikiindex.php?page=Committee+on+Payment+and+Settlement+Systems+%28CPSS%29
MicroCapital Universe Profile: International Association of Deposit Insurers (IADI) http://www.microcapital.org/microfinanceuniverse/tikiindex.php?page=International+Association+of+Deposit+Insurers+%28IADI%29
MicroCapital Universe Profile: International Association of Insurance Supervisors (IAIS) http://www.microcapital.org/microfinanceuniverse/tikieditpage.php?page=International+Association+of+Insurance+Supervisors+%28IAIS%29
MicroCapital Story: September 10, 2010, MICROFINANCE PAPER WRAP UP: Microfinance Activities and the Core Principles for Effective Banking Supervision, by the Basel Committee on Banking Supervision http://www.microcapital.org/microfinance-paper-wrap-up-microfinance-activities-and-the-core-principles-for-effective-banking-supervision-by-the-basel-committee-on-banking-supervision/
MicroCapital Story: February 23, 2010, MICROCAPITAL BRIEF: Basel Committee on Banking Supervision Issues Consultative Paper on Microfinance http://www.microcapital.org/microcapital-brief-basel-committee-on-banking-supervision-issues-consultative-paper-on-microfinance/
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