Washington, D.C., February 13, 2014 - The Institute of International Finance, the global association of the financial industry, today sent a letter to G20 Finance Ministers and Central Bank Governors ahead of their meeting in Sydney. The letter expressed support for this year's agenda, including Australia's themes of promoting stronger economic growth, creating jobs, and making the global economy more resilient to future shocks.

IIF also highlighted three areas where it encouraged the G20 to take action.

Complete the G20 Regulatory Reform Agenda

IIF reiterated the financial industry's continued support of the G20's financial regulatory reform agenda. It noted that the system is now much safer than it was before the crisis, thanks to the industry's own actions and regulatory reforms undertaken. It urged the G20 to maintain a risk-based capital system, warning that switching to "simple" alternatives would be a wrong turn at a time when planned reforms are just becoming effective. IIF also noted its strong support of a refined capital framework that better balances risk sensitivity, simplicity and comparability.

IIF called for the G20 to remain committed to its original goal of a globally consistent regulatory framework. It warned that global approaches may be undermined by unilateral, uncoordinated, or extraterritorial actions by individual countries, to the detriment of a global level playing field and, more importantly, the effectiveness and resilience of the global financial system.

Promote Investment in Infrastructure

IIF supported the G20's push to enhance the role of the private sector in financing investment in infrastructure. IIF noted that investment needs are projected to increase from $2.6 trillion per year at present to $4.3 trillion by 2030 and that the public sector alone cannot meet those financing requirements.

IIF identified a number of key impediments to private sector financing of infrastructure that need to be addressed. These include the ongoing deleveraging of the banking sector; uncertainty about the potential impact of proposed regulatory changes that include higher capital charges for long-term investments in the insurance and pension sectors; uncertainty about the macroeconomic outlook; and, in many emerging markets, policy and political uncertainties, governance concerns, and capacity constraints.

IIF said it strongly supported efforts by both the public and private sectors to develop capital market instruments for infrastructure projects to help facilitate deeper private sector involvement. IIF also noted that fostering the emergence of infrastructure financing marketable instruments as a new asset class would increase both the pool of investable and attractive long-term assets and the supply of private financing.

Encourage Policies that Strengthen Capital Flows to Emerging Markets

IIF noted that emerging market conditions have continued to be quite choppy, including a significant market correction in early 2014. IIF also noted that market stresses seemed to reflect increased investor concerns about macro-economic imbalances, dependence on external financing, and other political and policy uncertainties in several vulnerable emerging market countries. IIF encouraged the U.S. Federal Reserve to continue prudent management and effective communication with regard to its exit from quantitative easing. It also urged vulnerable emerging market economies to advance solid and convincing macroeconomic frameworks. It stated that emerging market economies need to step up implementation of the broad range of structural reforms to overcome infrastructure bottlenecks and promote faster expansion of their productive capacity.

IIF also welcomed the emphasis by the G20 on promoting global financial integration and enhanced financial inclusion in developing countries.

The Institute of International Finance (IIF) is a global association of more than 470 financial institutions. Its mission is to support the financial industry in the prudent management of risks, including sovereign risk; the development of sound industry practices and standards; and the advocacy of regulatory, financial and economic policies that are in the broad interests of its members and global financial stability. Within its membership the IIF counts leading global banks, insurers, pension funds, asset managers and sovereign wealth funds, as well as leading law firms and consultancies. More information about the Institute of International Finance is available at www.iif.com.