Tangible steps towards greater global financial transparency needed
Transparency International calls on finance ministers from the Group of 20 leading economies (G20), meeting this week to maintain the growing pressure for greater corporate transparency, particularly of financial institutions.
In a letter to Ministers of Finance from G20 countries and Governors of Central Banks, Transparency International said that corporate transparency is a crucial element for delivering economic growth and fighting corruption.
“The G20 finance ministers have the power to stop corrupt people hiding behind secret bank accounts and opaque corporate structures. Making corporate structures more transparent will help meet the stated aims of the World Bank, IMF and G20: increase financial stability, restore trust and prevent money laundering," said Transparency International chair Huguette Labelle. “This year we have seen a flurry of new rules at EU level. Now it is the turn of the G20 as a whole to keep up the momentum for global financial reform.”
Transparency International is pleased to note that finance ministers have already expressed support for work on identification of beneficial owners of corporate vehicles.
New measures must ensure thorough disclosure of increasingly complex corporate structures so that investors can better assess risks and regulators can identify fraud and abuse.. A 2011 World Bank report warned that out of 150 high-level corruption cases, 172 companies used 800 corporate vehicles involving more than US $50 billion.
The letter calls on the G20 to meet its commitments to financial reform by taking a firm hand in ensuring:
- the incorporation of beneficial ownership information into annual, public corporate registries,
- all national financial regulatory and supervisory rigorously enforce Know Your Customer and due diligence procedures to prevent anti-money laundering,
- more countries join the Global Forum on Transparency and Exchange of Information and the OECD Multilateral Convention on Mutual Administrative Assistance in Tax Matters, and support the automatic exchange of financial information. 10 EU countries have taken such steps in the past fortnight.
Each spring and autumn, the Boards of Governors of the World Bank Group and International Monetary Fund (IMF) hold their Annual Meetings to discuss a range of issues related to poverty reduction, international economic development and finance.
Transparency International is the civil society organisation leading the fight against corruption
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