It is already obvious that the previous systems of interaction between institutions have outlived their usefulness
The global financial system requires “reassembly”. The relevant institutions are already undergoing a double transformation. On the one hand, new centers of growth have emerged — the states of the Global South, on the other hand — innovative technologies are being actively introduced. At the same time, the processes are taking place against the backdrop of growing geo-economic fragmentation, geopolitical changes and the emergence of new socio-economic challenges. The role of the financial sector, and banks in particular, in the development of countries will be discussed by participants in the session “Transformation for Global Growth: The Role of the Financial Sector in Achieving Strategic Development Goals,” which will be held on June 7 as part of the SPIEF 2024 business program, according to the forum website.< /p>
The speakers of the session initiated by VTB will be Russian Deputy Prime Minister Alexander Novak, Finance Minister Anton Siluanov, President and Chairman of the Board of VTB Andrey Kostin, relevant ministers from the UAE, Oman, Serbia and Egypt and participants from Venezuela and Tunisia. They will discuss what changes in the financial sector of Russia and other countries with emerging markets are most in demand today in the context of national economic development challenges, what should be the main priorities for transforming the global financial system, and what needs to be done to deepen interaction between the Global South in the financial sector.< /p>
According to financial industry experts, the transformation of the global financial system is already underway.
“This really looks like economic fragmentation, when economies “diverge into their own corners,” and the usual institutional ties are destroyed, including the infrastructure of international economic cooperation and development. We will soon see a new wave of integration. On the basis of institutions that are not politicized, not biased and do not seek to use their position for the purposes of blackmail, sanctions, or limiting the market development of institutions — that is, replacement with Western ones, but in the jurisdictions of that same “Global South,” Arseny, president of the BusinessDrom agency, told RIA Novosti Poyarkov.
According to Poyarkov, instead of SWIFT, exchange infrastructure and Western depositories, politically neutral institutions will be ready to openly work with banks, companies, issuers from any country. This opinion is supported by the vice-president of the Association of Russian Banks, Alexey Voylukov. He told Izvestia that countries in the Global South must create and develop new infrastructure. For example, the Russian SPFS system can replace outdated formats of interbank interaction. It uses more modern technologies and works faster than SWIFT. In addition to it, according to the expert, domestic SBP, CyberFT, Chinese CIPS and a number of private developments on the blockchain have prospects.
Let us recall that a year ago, President and Chairman of the Board of VTB Andrei Kostin, speaking at the Financial Congress, emphasized that the banking sector in Russia must solve problems not only at the domestic, but also at the international level.
“Now is the time for the deepest transformation. It’s not enough for us to continue to focus only on ourselves; we need to engage in radical reform and build a new system of international payments and the infrastructure of the global capital market,” Kostin said.
To reduce dependence on international regulation, Kostin proposed that the Central Bank and the country’s leadership create a new parallel system of the “Global South”, which consists of four points. This is the replacement of SWIFT with a new financial messaging system, the replacement of direct correspondent relations between banks, which are built primarily through American banks, with horizontal connections between local banks based on blockchain technology, the creation of an alternative international depositary settlement hub, as well as the creation of new tools for attracting capital instead of, for example, Eurobonds (currency bonds), the entire infrastructure for issuing which is located in the West.