G20 finance chiefs to discuss risks to economy, ending secret company ownership

Mon Oct 3, 2016 10:46am EDT
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By Jan Strupczewski

BRUSSELS Oct 3 (Reuters) - Financial leaders of the world's 20 biggest economies sit down this week to discuss the main risks to global economic growth and how to clamp down the secretive ownership of companies that allows for tax avoidance and money laundering.

The venue will be a working dinner in Washington on Oct. 6 for G20 finance ministers and central bank governors before the annual meetings of the International Monetary Fund.

In a paper prepared for participants, China, which holds the rotating presidency of the G20 this year, notes that global financial markets have recovered from the fallout of Britain's vote to leave the European Union, but that uncertainties remained.

"Financial volatility picked up recently, partly reflecting market sentiment for the recent release of monetary policy stance by the central banks of key advanced economies," said the note, seen by Reuters.

"Downside risks remain heightened. Changing expectations regarding the pace of U.S. monetary policy normalisation could have significant repercussions for capital flows and financial market volatilities," it said.

"The uncertainties from the progress of Brexit would also add to instability risks, while concerns about bank profitability amid extraordinarily low/negative interest rates still persist," it said.

Following up on a long-standing drive to curb tax avoidance and money laundering as well as terrorist financing, the ministers will discuss a stronger push to share information on who owns companies, in what is known as "beneficial ownership".

Anonymous companies, also called phantom firms or shell companies, are entities that are used to disguise the identity of their true owner, who ultimately controls or profits from the company. Such owners are also known as the "beneficial owners".   Continued...