Institute Of International Finance Inc

TO SUPPORT FINANCIAL INDUSTRY IN PRUDENTLY MANAGING RISKS AND TO FOSTER GLOBAL FINANCIAL STABILITY.

GLOBAL POLICY INITIATIVES ON ESG, SUSTAINABILITY AND CLIMATE FINANCE. DURING 2021, THIS WORKSTREAM CONTINUED TO RISE IN IMPORTANCE AND THE IIF MADE STRIDES ACROSS SEVERAL FRONTS, INCLUDING IN ADVOCATING FOR GREATER ALIGNMENT OF MARKET AND POLICY FRAMEWORKS FOR SUSTAINABLE FINANCE IN CRITICAL AREAS SUCH AS DISCLOSURE AND RISK ASSESSMENT. SOME NOTABLE ACHIEVEMENTS INCLUDED SPEARHEADING A TRANSFORMATIONAL EFFORT IN THE LEAD-UP TO COP26 TO DEVELOP A CONCRETE PATH FORWARD TO SCALE UP VOLUNTARY CARBON MARKETS; PLAYING A LEAD ROLE IN BRINGING TOGETHER LEADING FINANCIAL TRADE ASSOCIATIONS TO DEVELOP A SET OF "PRINCIPLES FOR A U.S. TRANSITION TO A SUSTAINABLE LOW-CARBON ECONOMY; RELEASING A REPORT ON 'NAVIGATING CLIMATE HEADWINDS' TO ADDRESS CLIMATE-RELATED AND ENVIRONMENTAL RISKS; AND ADVANCING NEW EFFORTS AROUND THE EVOLVING AGENDA ON NET ZERO ALIGNMENT. TO SUPPORT THESE EFFORTS, THE IIF INTRODUCED NEW ENGAGEMENT PLATFORMS AND EXPANDED OUR CORE WORK ON SUSTAINABLE FINANCE TOPICS. WE HAVE LAUNCHED A SERIES OF NEW POLICY AND PRACTITIONER EXPERT GROUPS ON SUSTAINABLE FINANCE, WHICH WILL ADDRESS TOPICS SUCH AS GLOBAL ALIGNMENT AND CONVERGENCE OF MARKET AND OFFICIAL SECTOR EFFORTS, AS WELL AS TECHNICAL ASPECTS OF CLIMATE AND ENVIRONMENTAL RISK ASSESSMENT, ALIGNMENT METHODOLOGIES, DATA, DISCLOSURE, AND CLASSIFICATION FRAMEWORKS.

RESEARCH ON EM ECONOMIC/FINANCIAL RISKS AND DEBT-RELATED ISSUES. IN 2021 OUR ANALYSIS OF THE PANDEMIC AND ITS EFFECT ON THE GLOBAL OUTLOOK, SUPPLY CHAINS, CAPITAL MARKETS, AND ON EMERGING AND MATURE COUNTRIES HELPED OUR MEMBERS NAVIGATE THROUGH AN ESPECIALLY VOLATILE PERIOD. WE EXAMINED KEY RESEARCH QUESTIONS ABOUT THE SPEED OF RECOVERY; THE OUTLOOK ON INFLATION IN DEVELOPED AND EMERGING MARKETS; WHAT POLICY ACTIONS ARE NEEDED; WHICH EMERGING MARKET REGIONS ARE BETTER OR WORSE POSITIONED IN THE RECOVERY; WILL THERE BE A LASTING IMPACT IN LABOR MARKETS; WHAT THE IMPACT WILL BE ON GLOBAL CAPITAL FLOWS; AND WHAT THE RISE IN DEBT AND INCREASE IN CENTRAL BANK BALANCE SHEETS WILL MEAN FOR OVERALL VULNERABILITIES AND GROWTH PROSPECTS AHEAD. OUR SOVEREIGN DEBT WORK ALSO CONTINUES AS WE REMAIN INTEGRAL TO THE DISCUSSIONS BETWEEN THE OFFICIAL AND PRIVATE SECTORS ON DEBT-RELATED ISSUES, PUSH FORWARD ON THE OECD DEBT TRANSPARENCY INITIATIVE, AND UPDATE OUR PRINCIPLES ON STABLE CAPITAL FLOWS AND SOVEREIGN DEBT RESTRUCTURING.

REGULATORY ADVOCACY AND POST-PANDEMIC REGULATORY REVIEW. IN THE FACE OF EXTRAORDINARY POLICY RESPONSES TO THE COVID-19 CRISIS, OUR BROADER ADVOCACY EFFORTS IN 2021 FOCUSED ON ANALYZING THE EFFECTIVENESS OF THE REGULATORY RESPONSE, AND OUR REPORT ON THE ROLE OF FINANCIAL MARKETS AND INSTITUTIONS IN SUPPORTING THE GLOBAL ECONOMY DURING THE PANDEMIC WAS WELL-RECEIVED. SIMILARLY, IIF WAS SOUGHT OUT AS THE MAIN INDUSTRY GROUP TO ORGANIZE MEETINGS WITH THE BCBS ON LESSONS LEARNED FROM THE COVID-19 CRISIS AND THE IMPLICATIONS FOR THE REGULATORY FRAMEWORK. WE ALSO BROUGHT TOGETHER SENIOR MEMBERS OF THE BCBS AND TOP EXECUTIVES OF OUR MEMBER FIRMS TO DISCUSS MARKET CONDITIONS AND RELATED SUPERVISORY RESPONSES. OUR ADVOCACY ON BEHALF OF OUR MEMBERS ADDRESSED A WIDE RANGE OF OTHER TOPICS AND WE RESPONDED TO NUMEROUS CONSULTATIONS ISSUED BY GLOBAL STANDARD SETTERS, KEY JURISDICTIONAL REGULATORS AND SUPERVISORS ON TOPICS COVERING SUSTAINABLE FINANCE AND CLIMATE RISK, OPERATIONAL RESILIENCE, INSURANCE, NON-BANK FINANCIAL INTERMEDIATION, CYBER SECURITY, AND ACCOUNTING, AMONG OTHERS. AS PART OF OUR ONGOING DIALOGUE WITH THE REGULATORY COMMUNITY, WE ALSO PROVIDED INPUT INTO POLICY DELIBERATIONS ON THE KEY AREAS IMPACTING THE INDUSTRY INCLUDING IN THE AREAS OF PRUDENTIAL CAPITAL AND LIQUIDITY REQUIREMENTS, EFFECTIVE AND EFFICIENT APPROACHES TO CROSS-BORDER REGULATION, MARKET FRAGMENTATION, POST-REFORM IMPACT EVALUATIONS (INCLUDING "TOO-BIG-TO-FAIL"), THE EFFECTIVENESS OF SUPERVISORY COLLEGES, CCP RESOLUTION, IBOR REFORM, AML/CFT POLICY REFORM, AND KEY INSURANCE AND ASSET MANAGEMENT INITIATIVES AND PRIORITIES.

DIGITAL REGULATION AND INNOVATION. IN 2021, UNDER THE LEADERSHIP OF THE STEERING COMMITTEE ON DIGITAL FINANCE, WE FOCUSED ON THE KEY TOPICS OF DIGITAL TRANSFORMATION, MODERNIZING REGULATORY FRAMEWORKS, AND CROSS-BORDER DATA FLOWS. OUR EFFORTS HAVE BEEN TARGETED AT ADVOCATING FOR OUR MEMBERS THROUGH RESPONSES TO CONSULTATIONS, SUCH AS OUR JOINT INDUSTRY RESPONSE ON "PRUDENTIAL TREATMENT OF CRYPTOASSET EXPOSURES." WE CONTINUE TO PRODUCE INNOVATIVE RESEARCH SUCH AS THE "REALIZING THE DIGITAL PROMISE" SERIES AND RECENT PAPERS ON "A STRATEGIC FRAMEWORK FOR DIGITAL ECONOMIC COOPERATION AND "CLOUD ADOPTION AND REGULATION IN ASIA PACIFIC FINANCIAL SERVICES AND DEVELOP INDUSTRY RELEVANT RESOURCES LIKE THE "IIF DATA ETHICS CHARTER AND FRT PODCASTS. WE ALSO PROVIDE OPPORTUNITIES TO TRADE PERSPECTIVES WITH PEERS, POLICYMAKERS AND TECHNOLOGY EXPERTS IN OUR DATA TALK SERIES, GLOBAL PAYMENTS FORUM, AND OPEN DIGITAL TRUST FOR DIGITAL IDENTITY PROJECT. WE ARE ALSO WORKING ON REGULATORY FRAMEWORKS FOR BIGTECHS IN FINANCE, DIGITAL CURRENCIES, AND ADOPTION OF CLOUD AND MACHINE LEARNING TECHNOLOGIES. WE ARE BRINGING TOGETHER IIF MEMBERS, TECHNICAL EXPERTS, CENTRAL BANK REPRESENTATIVES AND REGULATORS TO SHARE PERSPECTIVES ON CBDC AND STABLECOIN DEVELOPMENTS, RISKS, AND THE ROLE OF THE PRIVATE SECTOR. WE ARE ALSO EXPLORING THE PROLIFERATION OF DATA POLICIES AND REGULATION, THE "PLATFORMIZATION" OF FINANCE AND COMPETITION POLICY AND INITIATIVES THAT MIGHT UNDULY IMPACT FINANCIAL INSTITUTIONS, CROSS BORDER PAYMENTS, AND DIGITAL IDENTITY.