Paris, 16th January, 2020 – “G20 leaders must step up their game to strengthen cross-border coordination and remove artificial obstacles to improve the business and financing environment for SMEs, or we risk missing out on their potential”, said Business at OECD Chairman Phil O’Reilly at the Inception Event of the Saudi B20 Presidency. “We must also better address the unintended consequences of domestic and cross-border regulations. Digital technologies bring opportunities for more accessible and affordable finance and can benefit small companies worldwide, but also mitigate the risk of illicit financial flows which are said to amount to USD 1 trillion.”
On the occasion of the Saudi B20 Inception event, a new Business at OECD report released today (available here) highlights that trade finance, key to business trust in global trade activities, is a case in point for the need to make additional efforts to tackle regulatory fragmentation:
- The role and further development of trade finance is central to business trust in global trade activities, with four-fifths of those activities – worth USD 15 trillion a year – underpinned by specialized loans or guarantees.
- Access to services supporting trade transactions, especially financing and risk mitigation, should be made more easily and affordably accessible especially to SMEs to address the unmet demand for trade finance.
- Further developing “trade ecosystems” can support payments and enable trade financing, accessible to both SMEs and large corporates, leveraging both traditional data sources and new data arising from digital technologies.
Gianluca Riccio, Vice-Chair of the Business at OECD Finance Committee and member of the B20 Finance and Infrastructure Taskforce added: “We should carefully consider the cumulative burden of regulation, look at reforms with small players in mind, and have a holistic view across players to achieve sustainable, balanced growth. As highlighted in our paper, it is imperative for all policy-makers and standard-setting bodies to have an overarching view across regulations.”download (pdf)