The financial and regulatory world in 2020 will be much stronger, but only if nine fundamental principles are followed at the start of this new decade, says the ACCA (Association of Chartered Certified Accountants) in a policy paper entitled "Nine Steps to Financial Stability 2020."
"Who would have guessed when the year 2000 started that the end of Noughties would see financial meltdown in some of the world's key economies?" says Dr. Steve Priddy, ACCA's director of technical policy and research. "But a New Year and new decade is a good time to look ahead for the long term."
ACCA says that, by 2020, the following nine principles must be the bedrock for a global economy:
1. A separation of retail - or at the very least deposit taking - from investment banking and a return of distressed banks to the private sector in a profitable way
2. A return to a savings over debt culture combined with decent State post-retirement provision
3. An effective transition to the low carbon economy
4. Full and effective governmental support for small business by 'thinking small first'
5. A permanent secretariat for the G20 group of nations
6. A stable, transparent, fair and certain system of taxation
7. The effective adoption of International Financial Reporting Standards
8. Safe payments and consumer protection against bribery, money laundering, fraud and corruption
9. Effective corporate governance in both the public, private and third sectors.
Looking ahead, Dr. Priddy says of the nine principles there needs to be a shift in how we deal with debt. He adds that, in 2020, a savings culture will flourish and public and private sector occupational pension provision will be on an equal footing with balanced risk sharing.
"Consumers should no longer be confounded by savings products offered to them, and financial advice will be priced transparently," notes the ACCA director. Dr. Priddy also says that the G20 must be recognised as a permanent structure, with a secretariat based in Beijing.
The ACCA is also seeking a clearer carbon metrics and an international Emissions Trading Scheme that actually works in terms of generating clear price signals.
"For the accountancy profession itself, IFRS will be adopted on a global scale so that financial reporting will be consistent around the world," Dr. Priddy notes.