International regulatory consistency and coordination provide vital support for economic growth and financial stability, the Institute of International Finance wrote in its semiannual letter to the International Monetary Fund and World Bank.
"While there is room for improvement in how these bodies operate—notably in transparency, governance, public consultation and cost-benefit analysis—international regulatory consistency and coordination provide vital support for economic growth and financial stability," wrote the IIF.
"Consistent international standards are important to the efficient flow of capital to investment opportunities. International financial intermediation provides the necessary cross-border connection between borrowers and savers, contributing to financial sector depth—which in turn directly supports GDP growth."
The IIF urged the international standard-setting bodies to proactively pursue reforms to improve their transparency and undertake greater impact analysis, to help ensure that they can continue to make their very positive contributions to the global economy.
The IIF also warned that countries should avoid a retreat to trade protectionism, noting that robust global trade and cross-border investment have delivered tremendous economic growth and prosperity, lifting nearly a billion people out of poverty over the past 30 years.
To support open markets and promote the free flow of capital across borders, the IIF urged policymakers to put in place effective policy frameworks that address structural imbalances—with symmetrical adjustment on the part of both surplus and deficit countries.
The IIF called on both public and private sector investors to scale up infrastructure investment, taking advantage of improving global business sentiment and growing appetite for capital spending. Financing for green infrastructure and creation of green jobs, noted the IIF, would boost economic growth while also mitigating climate change risk.
The IIF also advocated removing information-sharing barriers and accelerating deployment of regtech solutions to better combat financial crime.
The letter was addressed to the Chairman of the International Monetary and Financial Committee at the IMF and the Chairman of the Development Committee of the World Bank.