Russian Minister of Finance Anton Siluanov has presented a report on improving the international monetary and financial system prepared jointly with the Yakov and Partners consulting firm.
The presentation was made during a high-level workshop attended by ministers of finance and central bank governors of BRICS countries, as well as their deputies and world’s leading economists.
The initiative aims to reform the international monetary and financial system based on four key principles: security, independence, accessibility, and sustainability.
“The BRICS countries represent over 36% of the global GDP. In 2006, the figure was 22%, or one and a half time less. The emerging economies account for 63% of global trade, however, if we look at investment flows, the situation is just the opposite: two-thirds of them stay in the developed countries. This gap clearly indicates that the developing economies have enormous potential, which cannot be unlocked with the current financial infrastructure in place”
Ilya Ivaninsky, expert partner at Yakov and Partners and director of the Central University Business Education and Analytics Center
As part of Russia’s BRICS chairmanship, the country’s Ministry of Finance and Central Bank, jointly with Yakov and Partners, analyzed the four components of the international monetary and financial system: payments, investments, reserves, and the global financial safety net (GFSN). Established more than 50 years ago, the current system has peaked, and now we need to find ways to update it.
“Creating an independent and resilient payment and settlement infrastructure as a key element of the international monetary and financial system is crucial for strengthening the autonomy and financial sovereignty of BRICS countries. The benefits of the proposals we presented and worked on within BRICS this year include building a fast, cheap, transparent, and universally accessible mechanism, while minimizing trade barriers”
Anton Siluanov, Russian Minister of Finance
“The recent crises in international trade and finance have highlighted the fundamental flaws of the current system, which stem from overdependence on the single currency and the centralized financial infrastructure. Russia’s proposals focus on implementing alternative solutions that will give a freedom of choice to all participants, thereby improving performance”
Yakov Sergienko, Head of Yakov and Partners
Implementation of BRICS’ revised international monetary and financial system is expected to increase the share of settlements in national currencies and ensure rapid advances in financial technology. Some prerequisites for these trends already exist in Russia: the ruble’s share in foreign trade settlements is now close to 40%, and expanded regulations needed for implementing the digital ruble are in place.
“We are setting the direction for BRICS’ future financial infrastructure. Its development is a process that will take time. BRICS countries need protective measures and alternative mechanisms. We plan to create payment and settlement solutions that will be acceptable to all participants within a year. And within five years, we hope to see other financial market tools being integrated as well, including those in insurance and credit ratings”
Anton Siluanov, Russian Minister of Finance
The report on improving the international monetary and financial system prepared by Russia as part of its BRICS chairmanship will be presented to the leaders of countries at the 16th BRICS Summit, which will take place in Kazan in late October.
