Institute Of International Finance Inc

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

IIF'S ECONOMIC RESEARCH DEPARTMENT CONTINUES TO LEAD IN THE FIELD OF MACROECONOMIC RESEARCH FOR EMERGING MARKETS. OUR PRIMARY PUBLICATION, GLOBAL MACRO VIEWS (GMV), ALONG WITH REPORTS SPECIFIC TO INDIVIDUAL COUNTRIES, HAVE CENTERED ON IMPORTANT THEMES WITHIN THE BACKDROP OF THE PERSISTENT GLOBAL GEOPOLITICAL UNCERTAINTY. KEY THEMES AND REPORTS FOR 2023 INCLUDED ANALYSIS ABOUT INFLATION AND OUR VIEW THAT IT WAS COMING DOWN FASTER THAN ANTICIPATED, TIMELY INTERVENTIONS ABOUT POTENTIAL SPILLOVER SCENARIOS FROM THE CONFLICT IN GAZA, DEVELOPING ECONOMIC ANALYSIS ABOUT THE SUDDEN CHANGES IN CHINA'S ECONOMIC FORTUNE DURING THE YEAR AND PROVIDING MEMBERS REAL-TIME ANALYSIS ON ECONOMIC POLICY IN COUNTRIES SUCH AS TURKEY AND ARGENTINA THAT HAD IMPORTANT ELECTIONS. GOING FORWARD WE WILL FOCUS ON GEOPOLITICAL VULNERABILITIES, CAPITAL FLOWS OUTLOOK FOR EMERGING MARKETS, CHINA, THE US RECOVERY, AND FINANCIAL DEEPENING.

AS REGULATORS EXAMINED POLICY FOLLOWING THIS YEAR'S FINANCIAL MARKET STRESS, WE HAVE ENGAGED AND RESPONDED TO KEY CONSULTATIONS ACROSS JURISDICTIONS, ENSURING POLICIES PROMOTE EFFICIENT CAPITAL MARKETS AND THE MOBILIZATION OF INVESTMENT AND SAVINGS FOR THE BENEFIT OF LOCAL ECONOMIES. IN 2023, WE RESPONDED TO MORE THAN 30 CONSULTATIONS FROM THE BCBS, CPMI, EBA, EIOPA, FATF, FSB, FSOC, IAIS AND UK TREASURY. IN ADDITION, WE'VE ENGAGED THE BCBS AND NATIONAL AUTHORITIES TO ENSURE PROPERLY COORDINATED FINAL IMPLEMENTATION OF THE BASEL III STANDARDS AND THE PRESERVATION OF A LEVEL PLAYING FIELD. OF NOTE, THE IIF STAFF PAPER "PRUDENTIAL REGULATORY POLICY AND THE IMPLICATIONS FOR THE FINANCIAL SECTOR AND THE ECONOMY" DISCUSSES THE INCREASED CAPITAL THAT WILL RESULT FROM BASEL III IMPLEMENTATION. IN ADDITION, GLOBAL STANDARD SETTING BODIES AND NATIONAL AND REGIONAL REGULATORY AND SUPERVISORY AUTHORITIES CONTINUE TO FOCUS ON NON-BANK FINANCIAL INTERMEDIATION (NBFI), WITH FINANCIAL STABILITY RISKS FROM NBFI LEVERAGE BEING A KEY AREA OF THE FSB'S POLICY FOCUS IN 2024. IIF HAS ENGAGED OUR MEMBERSHIP ON THIS TOPIC AND INTO 2024, THE IIF WILL ENGAGE AND HELP INFORM APPROACHES AS THEY ARE DEVELOPED, PARTICULARLY ON THE ISSUE OF PRIVATE CREDIT. ON OTHER KEY REGULATORY ISSUES, WE HAVE ADVOCATED FOR PRAGMATIC APPROACHES THAT REFLECT THE UNIQUE FEATURES OF THE INSURANCE SECTOR AS THE FSB AND THE IAIS CONTINUE THEIR WORK ON GLOBAL APPROACHES TO CAPITAL AND SYSTEMIC RISK, RESPONDING TO KEY IAIS CONSULTATIONS ON CLIMATE GUIDANCE AND THEIR FOUR-YEAR STRATEGIC PLAN. IN ADDITION, WE REMAINED FOCUSED ON AML/ FINANCIAL CRIME ISSUES, FOCUSING ON THREE AREAS OF SYSTEMIC EFFECTIVENESS: POLICY REFORM REGULATORY ENGAGEMENT; ENGAGEMENT IN INDUSTRY DIALOGUE AND TECHNOLOGY ENHANCEMENTS. IN 2023, WE'VE CONTINUED OUR THOUGHT LEADERSHIP PARTNERSHIP WITH DELOITTE TO DELIVER A SERIES OF WHITE PAPERS ON FINANCIAL CRIME REFORM PROGRESS AND RECOMMENDATIONS FOR NEXT STEPS. FINALLY, WE'VE CONTINUED OUR EFFORTS OF COORDINATION IN BOTH FINANCIAL REGULATIONS REGARDING CYBER RISK MANAGEMENT AND IN THE DEVELOPMENT OF OPERATIONAL RESILIENCE.

IN 2023, OUR FOCUS ON SUSTAINABLE FINANCE HAS MOVED FROM GOAL SETTING TO HELPING SUPPORT OUR MEMBERS AS THEY OPERATIONALIZE SUSTAINABILITY AND NET ZERO GOALS ACROSS DISCLOSURE, REPORTING, AND STRATEGIC PLANNING- ENSURING JURISDICTIONAL REQUIREMENTS ARE INTEROPERABLE AND DO NOT RELY ON HIGHER CAPITAL LEVELS FOR CLIMATE RISK. WE'VE PROMOTED A COMPREHENSIVE DEFINITION OF TRANSITION FINANCE THAT RECOGNIZES WHERE INSTITUTIONS ARE IN THEIR TRANSITION JOURNEY, AND, HAVE SUPPORTED MEMBERS ON THAT JOURNEY. IN 2023, WE'VE HELD 11 TRANSITION FINANCE WORKSHOPS GLOBALLY, FROM MILAN TO KUALA LUMPUR, ENGAGING MORE THAN 460 PARTICIPANTS. WE'VE RECENTLY PUBLISHED "THE ROLE OF THE FINANCIAL SECTOR IN THE NET ZERO TRANSITION", WHICH WE HAVE USED TO ENGAGE REGULATORS AND SUPERVISORS GLOBALLY, INCLUDING THE EUROPEAN SYSTEMIC RISK BOARD AND THE JAPANESE FINANCIAL SERVICES AGENCY, EMPHASIZING THAT TRANSITION PLANS ARE A TOOL OF BUSINESS STRATEGY RATHER THAN RISK MANAGEMENT. THIS YEAR IN Q4, WE'VE ALSO LAUNCHED OUR NATURE RELATED FINANCE WORKING GROUP TO STRONG MEMBER INTEREST. REGARDING OUR WORK ON SOVEREIGN DEBT, IN 2023 IIF WAS NAMED A PRIVATE SECTOR REPRESENTATIVE TO THE IMF'S GLOBAL SOVEREIGN DEBT ROUNDTABLE (GSDR) ALONGSIDE ICMA, BLACKROCK AND STANDARD CHARTEREDWE HAVE SHARED DEVELOPMENTS WITH OUR MEMBERS AND HAVE BEEN AN INTERMEDIATOR FOR DISCUSSIONS BETWEEN THE PRIVATE AND OFFICIAL SECTORS, AS THE USE OF THE COMMON FRAMEWORK IS TESTED AND CHALLENGED. WE'VE PROMOTED GLOBAL EFFORTS TO ENHANCE THE INTERNATIONAL SOVEREIGN DEBT ARCHITECTURE WHILE CLOSELY MONITORING IMPLEMENTATION OF THE RECENTLY UPDATED IIF PRINCIPLES FOR STABLE CAPITAL FLOWS AND FAIR DEBT RESTRUCTURING.