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The Executive Board of the International Monetary Fund (IMF) today completed the second review of Ghana’s economic performance under the program supported by an Extended Credit Facility (ECF) arrangement.1 Completion of the review enables the disbursement of SDR 83.025 million (about US$114.6 million), bringing total disbursements under the arrangement to SDR 249.075 million (about US$343.7 million).

In completing the review, the Executive Board also granted a waiver for the nonobservance of the performance criterion regarding non-accumulation of external arrears, based on the corrective measures being taken by the authorities. The Executive Board also approved new program targets for 2016.

Ghana’s three-year arrangement for SDR 664.20 million (about US$918 million or 180 percent of quota) was approved on April 3, 2015 (see Press Release No.15/159). It aims to restore debt sustainability and macroeconomic stability in the country to foster a return to high growth and job creation, while protecting social spending.

Following the Executive Board’s discussion on Ghana, Mr.Min Zhu, Acting Chair and Deputy Managing Director, said:
“Implementation of the ECF-supported program by the Ghanaian authorities continues to be broadly satisfactory, but the economic outlook remains difficult with risks tilted to the downside. It is encouraging that the government’s fiscal consolidation efforts are on track and that electricity production capacity is being gradually increased.

“The authorities should resolutely continue their fiscal consolidation efforts. With government debt continuing to increase and financing remaining a challenge, the 2016 budget rightly aims at a stronger consolidation than originally envisaged. In this regard, it is essential that the government sticks firmly to its policy of strict expenditure controls, by maintaining the wage bill within the budget limits, while controlling discretionary spending and protecting priority spending. It is also important to continue to adhere to the domestic arrears clearance plan and avoid incurring new domestic or external arrears. The authorities’ commitment to implement corrective measures if fiscal risks materialize is welcomed.

“To ensure that gains from fiscal consolidation will be sustained over the medium term, effective implementation of a wide range of ambitious reforms is needed. These include measures to broaden the tax base and enhance tax compliance, strengthen control of the wage bill, and enhance public financial management. The difficult financial situation of several state- owned enterprises in the utilities sector also calls for strong actions to avoid additional pressures on the budget.

“Against the backdrop of continued large financing needs and tight domestic and external financing conditions, the new medium-term debt management strategy is a welcome step to help reduce near-term financing risks, while balancing domestic and external financing in a way that will not jeopardize debt sustainability. The authorities should complement their strategy by stepping up work to deepen the domestic debt market.

“To help bring inflation down towards its medium-term target, Bank of Ghana (BoG) should stand ready to further tighten monetary policy if inflationary pressures do not recede as expected. The preparation of an amended Bank of Ghana Act and BoG’s commitment to gradually deepen the foreign exchange market will help make the inflation targeting framework more effective.

“Financial sector stability will need to be monitored closely in a context of deteriorating asset quality. The BoG should take immediate steps to increase resilience and address weaknesses in asset classification. Prompt implementation of the new banking laws currently under review by Parliament is also essential to safeguard financial sector stability.”

With the 15-year cycle of the anti-poverty Millennium Development Goals (MDGs), the United Nations officially will usher in with the commencement of 2016 – an even more ambitious set of goals to banish a whole host of social ills by 2030.

“The seventeen Sustainable Development Goals (SDGs) are our shared vision of humanity and a social contract between the world’s leaders and the people,” UN Secretary-General Ban Ki-moon said of the 2030 Agenda for Sustainable Development adopted unanimously by 193 Heads of State and other top leaders at a summit at UN Headquarters in New York in September.

“They are a to-do list for people and planet, and a blueprint for success,” he added of the 17 goals and 169 targets to wipe out poverty, fight inequality and tackle climate change over the next 15 years.

The 2030 Agenda for Sustainable Development calls on countries to begin efforts to achieve the 17 SDGs over the next 15 years. The goals address the needs of people in both developed and developing countries, emphasizing that no one should be left behind. Broad and ambitious in scope, the Agenda addresses the three dimensions of sustainable development: social, economic and environmental, as well as important aspects related to peace, justice and effective institutions.

The mobilization of means of implementation, including financial resources, technology development and transfer and capacity-building, as well as the role of partnerships, are also acknowledged as critical.

The 17 SDGs build on the eight MDGs, which specifically sought by 2015: to eradicate extreme poverty and hunger; achieve universal primary education; promote gender equality and empower women; reduce child mortality; improve maternal health; combat HIV/AIDS, malaria and other diseases; ensure environmental sustainability; and develop a global partnership for development.

Climate change: houses collapsing due to coastal erosion caused by rising sea levels in Shishmaref, Alaska. Photo: UNEP GRID Arendal/Lawrence Hislop
Not all the MDGs were met globally, depending on regions and the state of a country’s development, but significant progress was made in several areas:

In November, global leaders, diplomats and health experts gathered at UN Headquarters in New York to celebrate progress against one of the world’s leading killers with the announcement that the target to halt and begin reversing malaria incidence had been met. Progress since 2000 averted over 6.2 million malaria deaths, 97 per cent of which have been among young children.

Globally, the number of those living in extreme poverty declined by more than half, falling from 1.9 billion in 1990 to 836 million in 2015, with most progress occurring since 2000. Net primary school enrolment in developing regions has reached 91 per cent, up from 83 per cent in 2000.

Many more girls are now in school compared to 2000, with developing regions as a whole achieving the target to eliminate gender disparity in primary, secondary and tertiary education. Global under-five mortality has declined by more than half, dropping from 90 to 43 deaths per 1,000 live births between 1990 and 2015, from 12.7 million in 1990 to almost six million despite population growth in developing regions.

Maternal mortality has declined by 45 per cent worldwide since 1990, with most of the reduction occurring since 2000. In Southern Asia, it declined by 64 per cent between 1990 and 2013, and in sub-Saharan Africa by 49 per cent.

New HIV infections fell by approximately 40 per cent between 2000 and 2013 from an estimated 3.5 million cases to 2.1 million, and by June 2014, 13.6 million people living with HIV were receiving antiretroviral therapy (ART) globally, an immense increase from just 800,000 in 2003. ART averted 7.6 million deaths from AIDS between 1995 and 2013.

Official development aid from developed countries grew by 66 per cent in real terms between 2000 and 2014 to billion.

But progress has been uneven across regions and countries, leaving millions of people behind, especially the poorest and those disadvantaged due to sex, age, disability, ethnicity or geographic location. Targeted efforts will be needed to reach the most vulnerable people.

This is where the SDGs are expected to play a part. They stress everything from zero poverty, zero hunger, good health, quality education, gender equality, clean water and sanitation, and affordable clean energy, to decent work and economic growth, innovation, reduced inequalities, sustainable cities, responsible consumption, climate action, unpolluted oceans and land, and partnerships to achieve the goals.

The official ushering in of the 15-year cycle will take place over a 24-hour period, coming into effect in each region of the planet as the clocks strike their midnight peal on 31 December.

The Paris Conference on climate change in December is seen by many as the first test of political will to implement the 2030 Agenda for Sustainable Development.

“The Paris Agreement is a triumph for people, the planet, and for multilateralism. For the first time, every country in the world has pledged to curb their emissions, strengthen resilience and act internationally and domestically to address climate change. By addressing climate change we are advancing the 2030 Agenda for Sustainable Development,” Mr. Ban said.

Turning this vision into reality is primarily the responsibility of countries, but it will also require new partnerships and international solidarity. Everyone has a stake and everyone has a contribution to make. Reviews of progress will need to be undertaken regularly in each country, involving civil society, business and representatives of various interest groups.

At the regional level, countries will share experiences and tackle common issues, while on an annual basis at the UN, the High-Level Political Forum on Sustainable Development (HLPF), will take stock of progress at the global level, identifying gaps and emerging issues, and recommending corrective action. The SDGs will be monitored and reviewed using a set of global indicators. These will be compiled into an Annual SDG Progress Report.

Geneva, Switzerland, – Over 2,500 leaders from business, government, international organizations, civil society, academia, media and the arts will participate in the 46th Annual Meeting of the World Economic Forum in Davos-Klosters, Switzerland, on 20-23 January. The theme of the Meeting is “Mastering the Fourth Industrial Revolution”.

Earlier Industrial Revolutions advanced human progress through new forms of power generation, mass production and information processing. Building on a ubiquitous and mobile internet, smaller, cheaper and more powerful sensors, as well as artificial intelligence and machine learning, the Fourth Industrial Revolution is distinct in the speed, scale and force at which it transforms entire systems of production, distribution, consumption – and possibly the very essence of human nature.

“There are many challenges in the world today, and I feel that one of the most intense and impactful will be shaping the ‘Fourth Industrial Revolution’ – driven by the speed, the breadth and the complete ‘systems innovation’ of technological change underway. The challenges are as daunting as the opportunities are compelling. We must have a comprehensive and globally shared understanding of how technology is changing our lives and that of future generations, transforming the economic, social, ecological and cultural contexts in which we live. This is critical, in order to shape our collective future to reflect our common objectives and values,” said Klaus Schwab, Founder and Executive Chairman of the World Economic Forum.

Central questions that will be asked of the Fourth Industrial Revolution include: How will it transform industry sectors, including health, mobility, financial services and education? How can technology be deployed in ways that contribute to inclusive growth rather than exacerbate unemployment and income inequality? How can breakthroughs in science and technology help in solving problems of the global commons from climate change to public health? How will emerging technologies transform the global security landscape? How can governments build institutions capable of making decisions when the challenges they face are more complex, fast-moving and interconnected than ever before?

Taking a formative role in shaping the discussion at the Annual Meeting 2016 will be Co-Chairs:

Mary Barra, Chief Executive Officer, General Motors, USA
Sharan Burrow, Secretary-General, International Trade Union Confederation (ITUC), Belgium
Satya Nadella, Chief Executive, Microsoft, USA
Hiroaki Nakanishi, Chairman and Chief Executive Officer, Hitachi, Japan
Tidjane Thiam, Chief Executive Officer, Credit Suisse, Switzerland
Amira Yahyaoui, Founder and Chair, Al Bawsala and Global Shaper of the Tunis Hub
Among the 2,500 participants at the next Annual Meeting will be business leaders from the Forum’s 1,000 Member companies, heads of state and government, leaders of international organizations, civil society and religious organizations, academia, the media and the arts. Alongside will be recognized leaders from other Forum communities, including Global Shapers, the Schwab Foundation for Social Entrepreneurship, Young Global Leaders and Technology Pioneers.

The Annual Meeting programme comprises over 250 sessions of which over 100 sessions will be webcast live. As well as generating ideas and solutions to help shape global, regional and industry agendas, the programme will also support the Forum’s work in harnessing public-private cooperation in nine key challenge areas.

Beijing, – JPMorgan Chase & Co. (NYSE: JPM) announced today its Strategic Cooperation Agreement with Postal Savings Bank of China (PSBC), the largest unlisted bank and the sixth largest commercial bank in China in terms of assets. The two banks also signed a Securities Purchase Agreement and an Investors Rights Agreement.

The agreement encompasses multiple levels of collaboration between the two banks, leveraging the leading retail, consumer and commercial banking franchises of JPMorgan Chase & Co., as well as its global corporate and investment bank and asset management businesses. As one of the most respected global financial services firms, JPMorgan Chase & Co. operates some of the world’s most sophisticated and secure banking distribution channels. The company is also well recognized for its risk management practices, which are continuously strengthened and aligned to the highest standards. JPMorgan Chase & Co. will provide support and expertise to PSBC as it invests in and introduces new distribution capabilities while further strengthening its risk management processes.

Nicolas Aguzin, CEO for J.P. Morgan, Asia Pacific, said: “We are delighted to partner with PSBC and look forward to making a contribution to China’s financial reforms by drawing on our global expertise and experience.”

“Our strategic partnership with PSBC is a strong endorsement of the firm’s long term commitment to China, a market where we see tremendous growth potential. We believe the country’s financial market reforms will underpin future economic development locally while also contributing to greater economic stability globally,” he added.

PSBC operates more than 40,000 branches nationwide, covering 98% of Chinese counties and serving a customer base of 500 million people.

JPMorgan Chase & Co. is one of the largest universal banks globally and its core businesses hold industry leading positions. Its Global Corporate and Investment Bank serves over 80% of the Fortune 500 and ranks #1 in global debt, equity and equity-linked business. It is also the #1 USD clearinghouse with a 19.2% share in 2014. Operating under the Chase brand, the Consumer and Community Banking has business relationships with ~50% of U.S. households and in 2014 was voted #1, for the third consecutive year, in the America Consumer Satisfaction Index among large banks. It is also the largest US credit card issuer based on loans outstanding. J.P. Morgan Asset Management is one of the largest asset managers in the world, with US$1.7 trillion of assets under management as of 3Q2015.

About JPMorgan Chase & Co.
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.4 trillion and operations worldwide. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world’s most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.

About JPMorgan China
J.P. Morgan commenced operations in China in 1921 with the opening of an office in Shanghai. Today, J.P. Morgan in China offers its clients a wide range of services across investment banking, risk management, commodities, cash management, trade finance, loans, foreign exchange and derivatives, asset management, and futures brokerage. The firm serves Chinese and international corporates, financial institutions and government agencies through its network of offices and branches in Beijing, Shanghai, Tianjin, Guangzhou, Chengdu, Harbin, Suzhou, Shenzhen and Zhongshan.

FAIRFIELD, Conn. – GE (NYSE: GE) has signed an agreement to sell its equipment lending and leasing business in Mexico to Linzor Capital Partners, a leading pan-regional private equity firm that focuses on Latin American middle market investments. The transaction includes employees of the business and represents aggregate GE ending net investment (ENI) of approximately US$1.1 billion.

Linzor was founded in 2006 and currently holds investments in the financial, education, industrial, retail, and consumer finance sectors across Latin America. In 2011, Linzor acquired GE Capital’s Trailer Fleet Services business in Mexico.

“We are pleased to sell our equipment finance business in Mexico to Linzor, a leading private equity firm that we know well and is fully committed to investing and growing in the Latin American financial services industry,” said Keith Sherin, GE Capital chairman and CEO. “Linzor values our domain expertise and customer relationships, which is a testament to the hard work of our GE Capital teams in Mexico.”

As previously announced, GE is embarking on a strategy to focus on its high-value industrial businesses and is selling most GE Capital assets. GE and its Board of Directors have determined that current market conditions are favorable to pursue disposition of these assets. GE will retain the financing verticals that relate to GE’s industrial businesses.

When completed, this transaction will contribute approximately US$0.1 billion of capital to the overall target of approximately US$35 billion of dividends expected to be paid to GE under this plan (subject to regulatory approval). With the transaction, the total ENI for 2015 announced sales is about US$146 billion.

“We are pleased with the progress we are making to reach and close agreements for our businesses and assets,” concluded Sherin. “This transaction signifies our final slated sale in Mexico, but we remain committed to the market and our customers through our GECAS, EFS and Healthcare Equipment Finance businesses.”

The transaction is subject to customary regulatory and other approvals and is expected to close at the end of the first quarter of 2016. Citigroup Global Markets Inc. provided financial advice and Gibson Dunn & Crutcher LLP and Creel, García-Cuéllar, Aiza Y Enriquez, S.C. provided legal advice.

About GE:
GE (NYSE: GE) is the world’s Digital Industrial Company, transforming industry with software-defined machines and solutions that are connected, responsive and predictive. GE is organized around a global exchange of knowledge, the “GE Store,” through which each business shares and accesses the same technology, markets, structure and intellect. Each invention further fuels innovation and application across our industrial sectors. With people, services, technology and scale, GE delivers better outcomes for customers by speaking the language of industry. www.ge.com

GE’s Investor Relations website at www.ge.com/investor and our corporate blog at www.gereports.com, as well as GE’s Facebook page and Twitter accounts, including @GE_Reports, contain a significant amount of information about GE, including financial and other information for investors. GE encourages investors to visit these websites from time to time, as information is updated and new information is posted.

About Linzor Capital Partners:
Linzor Capital Partners is a leading pan-regional private equity firm focused on the middle market in Latin America. It operates through four local offices in Santiago, Chile, Mexico City, Mexico, Bogota, Colombia and Buenos Aires, Argentina. With the closing of its third fund, LCP III, in May 2015 totaling $621 million, Linzor has raised over $1.2 billion of capital commitments since inception. For more information, visit www.linzorcapital.com.

The Eurogroup welcomes the agreement that has been reached between Greece and the European Institutions, with input from the IMF, on the policy conditionality underlying the new ESM macroeconomic adjustment programme. The Eurogroup commends the Greek authorities for their demonstrated strong commitment as shown by the normalisation of the working methods with the Institutions and the conduct of the negotiations in a determined and swift manner. This agreement is in line with the parameters and key objectives set by the Euro summit on 12 July and provides a comprehensive framework for restoring the Greek economy to a sustainable path.

The Eurogroup welcomes the wide scope of the policy measures contained in the Memorandum of Understanding (MoU), which, if implemented with determination, will address the main challenges facing the Greek economy. We are confident that decisive and as swift as possible implementation of the reform measures as spelled out in the MoU will allow the Greek economy to return to a sustainable growth path based on sound public finances, enhanced competitiveness, high employment and financial stability.

Greece will target a medium-term primary surplus of 3.5% of GDP with a fiscal path of primary balances of -0.25% in 2015, 0.5% in 2016, 1.75% in 2017 and 3.5% in 2018 to be achieved notably through upfront parametric fiscal reforms supported by measures to strengthen tax compliance and fight tax evasion. Greece will undertake an ambitious reform of the pension system aimed at ensuring its sustainability, efficiency and fairness. It will specify policies to fully compensate for the fiscal impact of the Constitutional Court ruling on the 2012 pension reform and to implement the zero deficit clause or mutually agreeable alternative measures by October 2015. Greece has furthermore committed to key labour and product market reforms to open up the economy to investment and competition, as well as to modernise and depoliticise the public sector. With regard to the financial sector, Greece has committed to take decisive measures to safeguard stability, including a recapitalisation of the banks as required, measures to enhance the insolvency framework and a significant improvement of the governance of the banks and the Hellenic Financial Stability Fund (HFSF). Following the results of the Asset Quality Review and Stress Tests before the end of the year, the bail in instrument will apply for senior debt bondholders whereas bail in of depositors is excluded. The Eurogroup stresses that the agreed conditionality needs to be further specified as requested by the IMF a matter of priority, in particular in the areas of pension reforms and financial sector strategy and governance, in agreement with the three Institutions in time for the completion of the first review under the ESM programme. Moreover, Greece will take urgently needed steps to tackle the non-performing loan (NPL) problem in the banking sector. Given the magnitude of the problem, we urge the authorities to develop all necessary instruments to that end, including opening the market for NPL servicing and disposal with the appropriate safeguards to protect vulnerable debtors and exploring the possibility of a bad bank.

Compliance with the conditionality of the MoU will be monitored by the Commission in liaison with the ECB and together with the IMF, as foreseen in Article 13(7) of the ESM Treaty.

The Eurogroup stresses that a significantly strengthened privatisation programme is a cornerstone of the new ESM programme. The Eurogroup welcomes the Greek authorities’ commitment to adopt new legislation to ensure transparent privatisation procedures and adequate asset sale pricing, according to OECD principles and standards on the management of State Owned Enterprises (SOEs). To ensure a more ambitious privatisation process, an independent fund will be established in Greece under the supervision of the relevant European institutions by end-2015 and encompass the privatisation of independently valuated state assets, while avoiding fire sales. The Eurogroup expects the Greek government to endorse the plan for this fund by the end of October 2015 so that it can be operational by the end of the year. Its task will be to quickly identify, transfer over the lifetime of the programme, and manage valuable Greek assets through privatisation and other means, including minority shareholdings and to increase their value on a professional basis. This will include the shares in Greek banks after their recapitalisation, thus also enhancing banks’ governance. This should ensure that a targeted value of EUR 50 bn can be realised, by putting the assets on the market, of which EUR 25bn will be used for the repayment of recapitalization of banks and other assets and 50 % of every remaining euro (i.e. 50% of EUR 25bn) will be used for decreasing the debt to GDP ratio and the remaining 50 % will be used for investments. The legislation to establish the Fund shall be adopted in agreement with European institutions.

The Eurogroup appreciates that the Greek authorities have taken additional important legislative steps over the last few days. This supports the gradual process of rebuilding trust, demonstrating the authorities policy resolve and programme ownership. Those steps include notably additional fiscal measures on the tax and expenditure side, legislation on early retirement as well as an extensive set of actions in relation to the financial sector and product markets. In addition, in line with the Eurogroup statement of 16 July, the Greek authorities took measures to adjust and complete the legislation adopted on 15 July 2015. The authorities have also repealed a number of provisions backtracking on previous programme commitments.

The Eurogroup welcomes that the implementation of those prior actions has been assessed positively by the Institutions. The Greek authorities have confirmed their intention to complete by September the follow up actions identified by the Institutions, including the need to bring the adopted household insolvency law in line with the proposal of the Institutions.

Based on the assessment of the Institutions, the ESM financial assistance facility agreement will cover an amount of up to EUR 86 bn. This includes a buffer of up to EUR 25 bn for the banking sector in order to address potential bank recapitalisation and resolution costs.

The first tranche under the ESM programme of EUR 26 bn will consist of two sub-tranches. The first sub-tranche of EUR 10 bn will be made available immediately in a segregated account at the ESM for bank recapitalisation and resolution purposes. The second sub-tranche of EUR 16 bn will be disbursed to Greece in several instalments, starting with a first disbursement of EUR 13 bn by 20 August, followed by one or more further disbursements in the autumn subject to the implementation of key milestones based on measures outlined in the MoU and to be specified by the European Institutions and agreed by the EWG.

A second tranche for banking recapitalisation and resolution needs of up to EUR 15 bn can be made available after the first review and no later than 15 November, subject to the completion of the planned Asset Quality Review and Stress Test and the implementation of the financial sector deliverables of the review. These funds will initially be transferred to the segregated ESM account and can be released upon the agreement of the ESM Board of Directors.

The debt sustainability assessment was conducted by the Commission, in liaison with the ECB, as foreseen in Article 13(1) of the ESM Treaty. The analysis concludes that debt sustainability can be achieved through a far-reaching and credible reform programme and additional debt related measures without nominal haircuts. In line with the Euro summit statement of 12 July, the Eurogroup stands ready to consider, if necessary, possible additional measures (possible longer grace and repayment periods) aiming at ensuring that Greece’s gross financing needs remain at a sustainable level. These measures will be conditional upon full implementation of the measures agreed in the ESM programme and will be considered after the first positive completion of a programme review. The Eurogroup reiterates that nominal haircuts on official debt cannot be undertaken.

The Eurogroup considers the continued programme involvement of the IMF as indispensable and welcomes the intention of the IMF management to recommend to the Fund’s Executive Board to consider further financial support for Greece once the full specification of fiscal, structural and financial sector reforms has been completed and once the need for additional measures has been considered and an agreement on possible debt relief to ensure debt sustainability has been reached. Resulting policy conditionality will be a shared one as the policy conditionality underlying the ESM macroeconomic adjustment programme is developed in parallel to the one of the IMF. Once approved, the full re-engagement of the IMF is expected to reduce subsequently the ESM financing envelope accordingly. The Eurogroup welcomes the positive assessment of IMF staff of the policy conditionality contained in the MoU as confirmed by the IMF Managing Director and looks forward to an IMF programme based on the latter.

The Eurogroup considers that the necessary elements are now in place to launch the relevant national procedures required for the approval of the ESM financial assistance. The Eurogroup expects that the ESM Board of Governors will be in a position to authorise the European Commission signing the MoU on behalf of the ESM and approve the proposal for a financial assistance facility agreement by 19 August, subject to completion of national procedures, and thereby unlock the initial tranche of up to EUR 26 bn.

The G20 Leaders’ Communiqué says global growth is “uneven and continues to fall short of our expectations, despite the positive outlook in some major economies”. It cites among the major challenges, geopolitical issues, uncertainties in financial markets, shortfall in demand, structural problems and slow productivity growth.

Leaders have responded to these challenges by reiterating their commitment to implementing “sound macroeconomic policies in a cooperative manner to achieve strong, sustainable and balanced growth”.

In order to achieve this, they have committed to implementing “fiscal policies flexibly to take into account near-term economic conditions, so as to support growth and job creation, while putting debt as a share of GDP on a sustainable path.” They will also “consider the composition of [their] budget expenditures and revenues to support productivity, inclusiveness and growth.”

A concerted approach was highlighted as a key tool in rebalancing the global economy: “We will carefully calibrate and clearly communicate our actions, especially against the backdrop of major monetary and other policy decisions, to mitigate uncertainty, minimize negative spillovers and promote transparency. Against the background of risks arising from large and volatile capital flows, we will promote financial stability through appropriate frameworks, including by ensuring an adequate global financial safety net, while reaping the benefits of financial globalization.”

On the subject of exchange rates leaders reaffirmed their previous commitments and agreed to resist all forms of protectionism.

Lifting GDP
The G20 previously set itself a target of lifting collective gross domestic product by an additional 2% by 2018. On this subject, the communiqué states that analysis by the IMF, OECD and World Bank Group indicates implementation so far “represents more than one third of our collective growth ambition”. However, the leaders have acknowledged that more needs to be done: “We will strive more and take prompt action to expedite implementation of our remaining commitments.”

In this regard, the Antalya Action Plan, represents the G20 members’ adjusted growth strategies and implementation schedules for key commitments. This, says the communiqué, “reflects our determination to overcome global economic challenges”.

In the shadow of the attacks in Paris late Friday, the G20 leaders have released a statement on tackling the global terrorism threat. They condemn the “heinous terrorist attacks in Paris” and remain united in combatting terrorism. The fight against terrorism is a major priority for all G20 countries. The G20 leaders remain committed to tackling the financing channels of terrors. They have expressed concern over the acute and growing flow of foreign terrorist fighters and the threat it poses for all states. They vow to show international cooperation and solidarity in the fight against terrorism.

At a press conference in Antalya, Turkish President Erdogan released the G20 leaders’ final communiqué. He spoke about the three pillars of implementation, inclusiveness and investment for growth, which the G20 Turkish Presidency is centred around.

He began by addressing terrorism, condemning the recent attacks in Paris and Ankara. “The conflicts and instability in different parts of the world have a direct impact on all of us,” he said in an address to the press. Erdogan spoke about Turkey feeling the impacts of the Syrian refugee crisis and called on the international community to share the burden. He added that it would be a humanitarian mistake to defer from this responsibility.

“As leaders of G20, we have made it clear that we will make the best of our efforts to help out with these refugees,” he stated.

G20 STATEMENT ON THE FIGHT AGAINST TERRORISM
We condemn, in the strongest possible terms, the heinous terrorist attacks in Paris on 13 November and in Ankara on 10 October. They are an unacceptable affront to all humanity. We extend our deepest condolences to the victims of terrorist attacks and their families. We reaffirm our solidarity and resolve in the fight against terrorism in all its forms and wherever it occurs.

We remain united in combatting terroris The spread of terrorist organizations and significant rise globally in acts of terrorism directly undermine the maintenance of international peace and security and endangers our ongoing efforts to strengthen the global economy and ensure sustainable growth and development.

We unequivocally condemn all acts, methods and practices of terrorism, which cannot be justified under any circumstances, regardless of their motivation, in all their forms and manifestations, wherever and by whomsoever committee.

We reaffirm that terrorism cannot and should not be associated with any religion, nationality, civilization or ethnic group.

The fight against terrorism is a major priority for all of our countries and we reiterate our resolve to work together to prevent and suppress terrorist acts through increased international solidarity and cooperation, in full recognition of the UN’s central role, and in accordance with UN Charter and obligations under international law, including international human rights law, international refugee law and international humanitarian law, as well as through the full implementation of the relevant international conventions, UN Security Council Resolutions and the UN Global Counter Terrorism Strategy.

We also remain committed to tackling the financing channels of terrorism, particularly by enhanced cooperation on exchange of information and freezing of terrorist assets, criminalization of terrorist financing and robust targeted financial sanctions regimes related to terrorism and terrorist financing, including through swift implementation of Financial Action Task Force (FATF) standards in all jurisdictions. We will continue to implement relevant FATF recommendations and instruments. We call on FATF to identify measures, including pertaining to legal framework, to strengthen combatting of terrorism financing and targeted financial sanctions and implementation thereof.

Our counter terrorism actions must continue to be part of a comprehensive approach based on addressing the conditions conducive to terrorism as stipulated in UN Security Council Resolution 2178, countering violent extremism, combatting radicalization and recruitment, hampering terrorist movements, countering terrorist propaganda and to prevent terrorists from exploiting technology, communications and resources to incite terrorist acts, including through the internet. The direct or indirect encouragement of terrorism, the incitement of terrorist acts and glorification of violence must be prevented. We recognize the need at all levels to work proactively to prevent violent extremism and support civil society in engaging youth and promoting inclusion of all members of society.

We are concerned over the acute and growing flow of foreign terrorist fighters and the threat it poses for all States, including countries of origin, transit and destination. We are resolved to address this threat by enhancing our cooperation and developing relevant measures to prevent and tackle this phenomenon, including operational information-sharing, border management to detect travel, preventive measures and appropriate criminal justice response. We will work together to strengthen global aviation security.

The continued and recent terrorist attacks all across the world have shown once again the need for increased international cooperation and solidarity in the fight against terrorism. We will always remember the victims of these attacks.

9/11/2015- A further sharp downturn in emerging market economies and world trade has weakened global growth to around 2.9% this year – well below the long-run average – and is a source of uncertainty for near-term prospects, says the OECD.

In its latest twice-yearly Economic Outlook, the OECD projects a gradual strengthening of global growth in 2016 and 2017 to an annual 3.3% and 3.6% respectively. But a clear pick-up in activity requires a smooth rebalancing of activity in China and more robust investment in advanced economies.

Emerging market challenges, weak trade and concerns about potential output suggest higher downside risks and vulnerabilities compared with the OECD’s June Outlook.

Presenting the Outlook in Paris, OECD Secretary-General Angel Gurría said: “The slowdown in global trade and the continuing weakness in investment are deeply concerning. Robust trade and investment and stronger global growth should go hand in hand. G-20 leaders meeting in Antalya need to renew their efforts to secure strong, sustainable and balanced growth.” (Read the speech)

In the US, output remains on a solid growth trajectory, propelled by household demand, with GDP expansion expected to be 2.5% next year and 2.4% in 2017.

The recovery in the euro area is set to strengthen, helped by accommodative monetary policy, lower oil prices and an easing of the pace of budget tightening. Euro area activity is expected to grow by 1.8% in 2016 and 1.9% in 2017.

In Japan, recovery was derailed in 2015 by a sharp slowdown in demand from other Asian economies and sluggish consumption. Japan’s GDP growth is expected to accelerate to 1.0% next year, but to slow to 0.5% in 2017 due to the planned consumption tax hike.

Economic growth in China is projected to slow to 6.8% in 2015 and to continue to decline gradually thereafter, reaching 6.2% by 2017, as activity rebalances towards consumption and services. Achieving this rebalancing, whilst avoiding a sharp reduction in GDP growth and containing financial stability risks, presents significant challenges.

In other emerging economies, headwinds have generally increased, reflecting weaker commodity prices, tighter credit conditions and lower potential output growth, with the risk that capital outflows and sharp currency depreciations may expose financial vulnerabilities. Brazil and Russia have experienced recessions and will not return to positive growth in annual terms until 2017. By contrast, growth prospects in India remain relatively robust, with GDP growth expected to remain over 7% in the coming years, provided further progress is made in implementing structural reforms.

The Outlook calls for greater ambition by OECD and G20 countries in supporting demand and pursuing structural reforms to boost potential growth and ensure that its economic benefits are shared by all.

It calls for policies to support short-term demand, including on-going monetary and fiscal policy support in accordance with countries’ policy space. Collective action to increase public investment is essential and would increase growth without increasing debt-to-GDP ratios.

In the run up to the COP21 UN Climate Change Conference in Paris, a special chapter of the Economic Outlook calls for unequivocal action to address climate change, which is critical for long-term economic sustainability and healthy growth.

Most climate policies could be budget-neutral and support growth. There are plenty of examples of countries that have taken action successfully without negative consequences. An effective policy stance would create a more positive environment for investment that would support growth and trade, as well as put us on a path to urgently-needed climate improvement.

The Economic Outlook also looks at the labour market and fiscal impact of the European refugee surge, and will release on Thursday, in advance of the G20 summit in Antalya, a policy note on this issue.

In addition, the Outlook includes a scenario for the global impact of weaker demand growth in China and discusses a number of other issues including: rising US policy interest rates and spill-overs to emerging market economies; growth shortfalls in the euro area and Japan; revisions to potential output growth; and the impact of an increase in public investment in OECD economies.

FOSTER CITY, Calif. & LONDON–(BUSINESS WIRE)– Visa Inc. (NYSE: V) and Visa Europe Ltd. today announced a definitive agreement for Visa Inc. to acquire Visa Europe, creating a single global company. The transaction consists of upfront consideration of €16.5 billion with the potential for an additional earn-out of up to €4.7 billion payable following the fourth anniversary of closing, for a total value of up to €21.2 billion. The upfront consideration comprises €11.5 billion of cash and preferred stock convertible into Visa Inc. class A common stock valued at €5 billion.1 Both companies’ boards were unanimous in their support of the transaction. The transaction is subject to regulatory approvals and is expected to close in Visa Inc.’s fiscal third quarter of 2016.

As a result of the combination, European clients will have greater access to Visa Inc.’s scale and resources and global clients will have a more seamless experience. Additionally, European clients will benefit from direct access to Visa Inc.’s investments in innovative technology and differentiated products and services.

The transaction capitalizes on strong growth opportunities in a highly attractive region. It positions the combined Visa to create value through increased scale, efficiencies realized by the integration of both businesses, and benefits related to Visa Europe’s transition from an association to a for-profit enterprise.

Visa Europe, an association owned and operated by member banks and other payment service providers, is the payments leader in Europe. At the end of fiscal full-year 2015, there are more than 500 million Visa cards issued across Europe. The association is responsible for more than €1.5 trillion in payments volumes, processes over 18 billion transactions annually, and partners with approximately 3,000 financial institutions in 38 countries.

“We are very excited about unifying Visa into a single global company with unmatched scale, technology and services,” said Charles W. Scharf, chief executive officer, Visa Inc. “This transaction is beneficial for financial institutions, acquirers, merchants, cardholders, and other partners, as well as for our employees and shareholders. The Visa Europe team has done a tremendous job building a leading payments system that is trusted and respected across Europe, and together we will bring the power of electronic payments to more people, in more places, than ever before.”

“Visa is a great global brand with a proud history and exciting future. Visa Europe has delivered impressive results over recent years and the Board believes that it is the right time to reunite these two very healthy businesses under common management. The deal will unlock significant value for members both through the consideration paid and because the Board believes a combined Visa will be better positioned to serve the needs of customers going forward. We are confident that Visa Inc. is committed to long term investment and development of the European business,” said Gary Hoffman, Chairman of the Visa Europe Board.

Nicolas Huss, CEO Visa Europe added: “Integrating into one global business will ensure we have the financial strength and operational scale necessary to accelerate the next generation of payments throughout Europe. This will enable us to deliver world class solutions to our clients and open up exciting professional opportunities for our employees.”

The transaction will position the combined business to take advantage of a significant growth opportunity. In Europe an estimated 37 percent, or USD $3.3 trillion, of personal consumption expenditure is still done via cash and check. Europe has also been an early adopter of mobile payments, which analysts predict will see strong growth in the future given the widespread availability of Near Field Communication technology. Visa Inc. has aggressively launched new mobile payment partnerships, platforms and products that will enable faster growth and adoption of mobile payments in Europe. This includes new tokenization services, support for digital wallets and wearables, strategic investments in other enabling technologies, ecommerce and P2P payment capabilities, as well as the opening of several global innovation centers.

In discussing integration plans, Charles W. Scharf commented, “We look forward to the new integrated Visa, and we are fully committed to ensuring our efforts in Europe are tailored to meet local market needs. This includes being responsive to the evolving regulatory landscape, maintaining a European data center, and partnering with Europe’s growing payments ecosystem to co-develop locally-relevant products, services and experiences. This combination strengthens our payments system in Europe, as together we have even greater financial resources to invest in technology assets. Finally, we will continue to have a strong local management team in Europe, with London remaining as headquarters for the region.”

Deal Structure and Terms
Under the terms of the transaction’s definitive agreements, Visa Inc. will acquire Visa Europe for upfront cash consideration of €11.5 billion and preferred stock convertible into Visa class A common stock valued at €5 billion.1 In addition, Visa Europe members could potentially receive an earn-out cash payment of up to €4.7 billion including interest for a total transaction value of up to €21.2 billion. The earn-out will be based on achievement of net revenue targets during the 16 quarters following the closing of the transaction and will be payable after the fourth anniversary of the closing. It includes up to €0.7 billion of interest at a 4% rate, compounded annually.

The transaction will result from the exercise at the time of closing of a put option. As part of Visa’s 2007 reorganization, Visa Inc. entered into an agreement granting Visa Europe the put option, which, if exercised, would require Visa Inc. to purchase all of Visa Europe’s outstanding capital stock from its owners in accordance with a specified timetable and for a price determined by a specific formula. In connection with the transaction announced today, the put option was amended to reflect the agreed-upon purchase price and timing. If the transaction is not completed, the put option will revert to its original terms.

The preferred stock will ultimately be convertible into class A common stock subject to the satisfaction of certain conditions. Similar to Visa Inc.’s existing class B common stock, the conversion rate will be reduced in the event that Visa Inc. suffers losses related to certain covered litigation, relating primarily to the setting of interchange rates in Visa Europe’s territory.

Transaction Financing
In conjunction with the transaction, Visa Inc. will establish a long-term capital structure. Visa Inc. intends to issue senior unsecured debt in an amount ranging between USD $15 and $16 billion in its fiscal first quarter of 2016, with maturities ranging between 2 and 30 years depending on market conditions. The proceeds from the debt issuance will be used to fund the cash consideration and increase the repurchase of class A common stock outstanding in 2016 and 2017 to offset the effect of the issuance of preferred stock. Visa Inc.’s initial leverage is expected to be between 1.4 and 1.5 times gross debt to EBITDA and long-term leverage at between 1.1 and 1.5 times gross debt to EBITDA, maintaining flexibility to pursue future growth opportunities. Visa Inc. expects to maintain current investment credit ratings of A+ / A1.

Financial Implications
Visa Inc. expects the transaction to be dilutive to fiscal full-year 2016 adjusted earnings per share in the low single-digit percentage point range due to a number of factors, including the issuance of the preferred stock, the timing of share repurchases of class A common stock, and the issuance of debt relative to the timing of the close. Benefits from revenue synergies, cost savings, and increased repurchases of class A common stock will begin to accrue in fiscal full-year 2017, and Visa Inc. expects the transaction to be accretive to adjusted earnings per share in that fiscal year in the low single-digit percentage point range before one time integration costs. Following the completion of integration, the transaction is expected to be accretive to adjusted earnings per share in the high single-digit percentage point range by fiscal full-year 2020.

Upon closing the transaction, Visa Inc. expects one-time transaction costs of approximately USD $150 million including stamp duties to be incurred in fiscal full-year 2016. Cumulative integration related costs are expected to be approximately USD $450 million to $500 million through the end of fiscal full-year 2020. Approximately USD $200 million in pre-tax cost savings are expected annually, largely realized by the end of fiscal full-year 2020.

Greater detail on the terms of the preferred stock, the covered claims, and related matters can be found in Visa Inc.’s Form 8-K filed today.

About Visa Inc.
Visa Inc. (NYSE: V) is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable electronic payments. We operate one of the world’s most advanced processing networks — VisaNet — that is capable of handling more than 65,000 transaction messages a second, with fraud protection for consumers and assured payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa’s innovations, however, enable its financial institution customers to offer consumers more choices: pay now with debit, pay ahead of time with prepaid or pay later with credit products. For more information, visit usa.visa.com/about-visa, visacorporate.tumblr.com and @VisaNews.

About Visa Europe
Visa Europe is a payments technology business owned and operated by member banks and other payment service providers from 38 countries. Its members are responsible for issuing cards, signing up retailers and deciding cardholder and retailer fees. Visa Europe is the largest transaction processor in Europe, responsible for processing more than 18 billion transactions annually. There are more than 500 million Visa cards in Europe, and €1 in every €6 spent in Europe is on a Visa card. Since 2004, Visa Europe has been operating independently of Visa Inc. and incorporated in the UK, with an exclusive, irrevocable and perpetual license in Europe. Both companies work in partnership to enable global Visa payments in more than 200 countries and territories. For more information, visit www.visaeurope.com

SAN FRANCISCO, In a move that will help reduce expenses for U.S. small businesses that are doing business internationally, Wells Fargo (NYSE: WFC) today announced it has removed its foreign transaction fees on all business credit card and business line of credit access card transactions made outside the U.S. effective October 1. With this change, Wells Fargo is the only major U.S. bank that today does not charge a foreign transaction fee on all of its small business credit cards.

“More and more small businesses are finding opportunities to grow and operate in the global economy, and we want to help our small business customers do this as cost effectively as possible,” said Lisa Stevens, head of Small Business for Wells Fargo. “Reducing the expense of credit for purchases outside the United States – whether it’s for foreign travel expenses or for buying materials overseas – makes international business more economical for a small business and will add more money to their bottom line. It’s another step in our ongoing efforts to help America’s small businesses succeed financially wherever they do business. At the same time, it will strengthen the value we offer our customers, which we believe can help us increase customer retention and draw new customers.”

The fee is eliminated for all new and existing customers with Wells Fargo Business Elite, Business Platinum and Business Secured Credit Cards and Wells Fargo’s small business lines of credit with access cards. Prior to this change, a foreign currency conversion fee (2-3 percent) was assessed when business credit card and line of credit customers used their card for transactions that originate in a foreign currency.

The savings for a business owner can add up. For example, a business owner with a Business Platinum Card who made over 500 foreign transactions totaling approximately $27,500 during a one-year period would save an estimated $800 during that period by not paying foreign transaction fees. As another example, a Business Elite Card customer who made over 1,200 foreign transactions totaling about $122,000 during a one-year period would now save about $2,400 per year without the fee.

The elimination of the fee is among recent Wells Fargo business credit product enhancements to provide more value to small business owners, including adding more earnings value to the optional business credit card rewards program. In addition, all Wells Fargo business credit cards and business line of credit access cards feature EMV chip technology and provide Zero Liability Protection for a greater level of security.

About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a nationwide, diversified, community-based financial services company with $1.8 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through 8,700 locations, 12,800 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 36 countries to support customers who conduct business in the global economy. With approximately 265,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 30 on Fortune’s 2015 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy our customers’ financial needs and help them succeed financially. Wells Fargo perspectives are also available at Wells Fargo Blogs and Wells Fargo Stories.

Wells Fargo serves approximately 3 million small business owners across the United States and loans more money to America’s small businesses than any other bank (2002-2014 CRA government data). To help more small businesses achieve financial success, Wells Fargo introduced Wells Fargo Works for Small BusinessSM – a broad initiative to deliver resources, guidance and services for business owners. For more information about Wells Fargo Works for Small Business, visit: WellsFargoWorks.com and follow us on Twitter @WellsFargoWorks.

Real gross domestic product — the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes — increased at an annual rate of 1.5 percent in the third quarter of 2015, according to the “advance” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 3.9 percent.

The Bureau emphasized that the third-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 2 and “Comparisons of Revisions to GDP” on page 4). The “second” estimate for the third quarter, based on more complete data, will be released on November 24, 2015.

The increase in real GDP in the third quarter primarily reflected positive contributions from personal consumption expenditures (PCE), state and local government spending, nonresidential fixed investment, exports, and residential fixed investment that were partly offset by negative contributions from private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased.

Real GDP increased 1.5 percent in the third quarter, after increasing 3.9 percent in the second. The deceleration in real GDP in the third quarter primarily reflected a downturn in private inventory investment and decelerations in exports, in nonresidential fixed investment, in PCE, in state and local government spending, and in residential fixed investment that were partly offset by a deceleration in imports.

Real gross domestic purchases — purchases by U.S. residents of goods and services wherever produced — increased 1.5 percent in the third quarter, compared with an increase of 3.6 percent in the second.

Current-dollar GDP — the market value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production — increased 2.7 percent, or $121.1 billion, in the third quarter to a level of $18,034.8 billion. In the second quarter, current-dollar GDP increased 6.1 percent, or $264.4 billion.

Disposition of personal income
Current-dollar personal income increased $171.6 billion in the third quarter, compared with an increase of $139.5 billion in the second. The acceleration in personal income primarily reflected an acceleration in wages and salaries and an upturn in farm proprietors’ income that were partly offset by a deceleration in personal interest income.

Personal current taxes increased $15.8 billion in the third quarter, compared with an increase of $27.3 billion in the second.

Disposable personal income increased $155.9 billion, or 4.8 percent, in the third quarter, compared with an increase of $112.2 billion, or 3.4 percent, in the second. Real disposable personal income increased 3.5 percent, compared with an increase of 1.2 percent.

Personal outlays increased $136.6 billion in the third quarter, compared with an increase of $182.3 billion in the second.

Personal saving — disposable personal income less personal outlays — was $636.7 billion in the third quarter, compared with $617.5 billion in the second.

The personal saving rate — personal saving as a percentage of disposable personal income — was 4.7 percent in the third quarter, compared with an increase of 4.6 percent in the second. For a comparison of personal saving in BEA’s national income and product accounts with personal saving in the Federal Reserve Board’s financial accounts of the United States and data on changes in net worth, go to www.bea.gov/national/nipaweb/Nipa-Frb.asp.

Washington, DC — GE (NYSE: GE) announced today that it will invest up to $1 billion in the power, oil and gas, and healthcare sectors to support Indonesia’s accelerated economic growth. The announcement was made on the sidelines of a meeting between the President of the Republic of Indonesia, Joko Widodo, and the President of United States of America, Barack Obama. The investment will be made in tandem with GE’s participation in the country’s infrastructure build-out.

Elaborating on the $1 billion program, GE’s Vice Chairman John Rice said, “Indonesia has been an important and strategic country for us for over 75 years and the current government’s vision and more recent plans to accelerate spending on infrastructure have given us the confidence to make this commitment. GE’s spending over the next 5 years will target critical areas important to the economy and cover power generation, oil and gas, and healthcare. Through this investment, we hope to expand our local business operations significantly, in a way that we believe will lead to a multiplier effect on the economy.”

Indonesia has set an ambitious goal to increase power generation capacity by 35 GW by 2019. To facilitate achieving this goal, GE will bring its latest technology and will partner with local companies to expand their manufacturing and assembly capabilities, as well as enhance repair and service capabilities in country. In addition, GE will help build Indonesia’s human capital through technical and leadership training programs.

In the oil and gas space, GE’s investments will include expanding the current subsea equipment manufacturing facility to include other GE product lines, and partnering with local companies to expand manufacturing and assembly locally.

In the healthcare sector, GE will align with Indonesia’s objective of providing universal healthcare by supporting the expansion of the country’s primary healthcare ecosystem, including the development of up to 100 primary care clinics through technology and training innovations. Given the importance of healthcare for the country, GE relocated the headquarters of its healthcare business in ASEAN to Jakarta earlier this year.

These commitments will result in the creation of over 6,000 jobs, technology transfer, training of over 1,000 people a year, and the expansion of local supply chains as GE’s business grows.

Today GE employs nearly 1,000 people, with operations in Jakarta, manufacturing facilities in Yogyakarta and Batam, and a turbine service facility in Bandung. GE’s investment in its three facilities have directly provided jobs for 800 Indonesians, supported the local supply chain and enhanced export capabilities for the country. More than 90% of the equipment manufactured in its oil and gas facility such as subsea wellheads, surface wellheads, vertical christmas trees, tubular products and connectors used in oil and gas exploration and production is exported for use in global projects.

Indonesia has an enormous stake in maintaining the momentum behind its economic growth which will require deployment of cutting-edge technology and sustainable infrastructure solutions. GE is well positioned to meet the country’s needs with its latest and most fuel-efficient HA class heavy-duty gas turbines, mobile power solutions like the TM2500 for remote areas, and affordable primary care solutions like the VSCAN portable ultrasound device. GE has also helped to connect Indonesians across 17,000 islands, by providing fuel- efficient aircraft engines and locomotives. In addition to technology, GE can bring comprehensive financing solutions and development expertise to help the country deliver on its infrastructure projects.

About GE
GE (NYSE: GE) imagines things others don’t, builds things others can’t and delivers outcomes that make the world work better. GE brings together the physical and digital worlds in ways no other company can. In its labs and factories and on the ground with customers, GE is inventing the next industrial era to move, power, build and cure the world. www.ge.com.

1. We, the Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development, held our ninety-fourth meeting in Lima, Peru on October 8, 2015 with Alain Bifani, Director-General of the Ministry of Finance of Lebanon in the Chair; Mauricio Cárdenas, Minister of Finance and Public Credit of Colombia as First Vice-Chair; and Sufian Ahmed, Minister of Finance and Economic Development of Ethiopia as Second Vice-Chair.

Global Economy and Implications for Emerging Markets and Developing Countries
2. Growth in the global economy is weaker than expected at the time of our last meeting. Emerging markets and developing countries (EMDCs) remain the key drivers of global growth, although some are experiencing a slowdown. Downside risks have risen for many of our countries, including tightening financial conditions, reduced capital flows, and persistent low commodity prices. In this context, we call for effective and well-sequenced policy that is adequately communicated to guard against potential financial instability risks, including those coming from normalization of U.S. monetary policy. We stress the importance of a more inclusive SDR basket and look forward to the completion of the work of the International Monetary Fund (IMF) on the method of valuation in view of recent changes in the economic weights in global trade and financial flows.

3. In the context of uncertainty and increased volatility, we must continue to build strong foundations for growth while addressing unemployment, poverty, and inequality. Strengthened global financial safety nets should be a priority in order to ensure the availability of adequate liquidity support in times of need, and we call on the international financial institutions (IFIs) to step up their efforts in this regard. We recognize the important role of regional, bilateral, and multilateral arrangements that can provide complementary precautionary financing to help countries face potential shocks.

4. EMDCs are disproportionately affected by the influx of refugees and internally displaced populations, including as a result of terrorism and conflicts. We call for strong and timely support by the international community in alleviating their impact, and for enhanced support, including through concessional financing from the IFIs. More broadly, we continue to call on the IMF and the World Bank Group (WBG) to strengthen their support for fragile and conflict-affected countries.

Financing the 2030 Sustainable Development Agenda
5. We welcome the 2030 Agenda for Sustainable Development and the Sustainable Development Goals (SDGs), which focus strongly on eradicating poverty in all its forms and dimensions and achieving sustainable development in its three dimensions – economic, social, and environmental – in a balanced and integrated manner. We also welcome the Addis Ababa Action Agenda on financing for development. Building the foundations for strong, inclusive, and sustainable growth by investing in people, promoting effective public institutions, investing in sustainable infrastructure, and putting in place solid economic policy frameworks and fundamentals will be crucial to achieving the SDGs.

6. We stress the importance of country ownership and leadership in the implementation of the SDGs, but the agenda must be underpinned by credible means of implementation and a revitalized global partnership for sustainable development. Mobilizing sustained and predictable financing from various sources will be essential to the achievement of our development goals. To this end, we call for scaled-up support from the IFIs, accompanied by peer learning. We recognize the initiatives by the IMF and WBG to support the implementation and financing of the 2030 Agenda, in line with country priorities. We urge their management to define a clear action plan to help countries in the implementation of such complex agenda. We also call for strengthened efforts by the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) to catalyze private financing.

7. We underscore the vital need to increase the quantity and quality of investments in infrastructure to support growth, contribute to poverty reduction, and promote environmental resilience. Efforts by both the public and private sector, at the country and international levels, are necessary given large infrastructure deficits and financing requirements. We call on the multilateral development banks (MDBs) to strengthen their roles in supporting infrastructure development and financing, including at regional levels. We also call on the IFIs to support developing countries to have greater access to external infrastructure financing while maintaining debt sustainability. We look forward to the operationalization of the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank (NDB).

8. To enhance the ability of MDBs to finance infrastructure investments and support development, we call on MDBs to ensure adequate capitalization and to optimize their balance sheets, while maintaining financial integrity. In this context, we also call for further work and dialogue to ensure that methodologies employed by credit rating agencies to gauge the MDBs’ financial strength, which is the basis of their credit ratings, take into account the specific characteristics of the MDBs and appropriately assess their risks.

9. Concessional resources will continue to be an important source of financing for development in the low income countries. Fulfillment of existing commitments from advanced economies and ensuring the best development impact of official development assistance (ODA) must remain key priorities. We note the proposal by the WBG to leverage existing International Development Association’s (IDA) resources but we stress that it is critical to preserve its regular replenishments and concessionality as core elements of IDA. This measure should not negatively impact the voice and participation of developing countries in the WBG’s governance. Increasing the participation of developing countries in policy setting will help ensure development impact informed by experience of the use of IDA resources. We also welcome the review of IDA’s non-concessional borrowing policy for low income countries, with a view to increasing flexibility in their access to financial markets. We look forward to the review of the IMF/WB framework for Debt Sustainability Assessments. We also urge the international community to work with small and climate vulnerable developing countries in finding solutions for improving their debt sustainability, including by enhancing their access to concessional financing.

10. We are concerned about the adverse impacts of Illicit Financial Flows (IFFs) and harmful tax avoidances, especially by multi-national firms, on the sustainability of public finances, particularly in African countries. We consider policies that combat IFFs as vital to raising revenues and supporting the attainment of the SDGs, consistent with agreement in the Addis Ababa Action Agenda. This is made even more urgent in the context of uncertainty with respect to future ODA flows and the investments necessary to support the post-2015 agenda. We welcome the proposed work on illicit flows by the WBG and the IMF as well as their commitment to assist countries to build capabilities in developing domestic policies and practices that reduce such flows. International tax cooperation is an important complement to our domestic resource mobilization efforts. We call for the participation of developing countries on an equal footing in the implementation of G20/OECD Base Erosion and Profit Shifting Project and Automatic Exchange of Information initiative. We welcome the commitment of the IMF and the WBG to deepen the dialogue with developing countries and help increase their voice on international taxation issues. We also welcome the U.N. Tax Committee’s efforts to encourage dialogue among tax authorities worldwide. Asset recovery and repatriation of funds to countries of origin also represent an important component of global cooperation.

11. We are concerned about the unintended consequences of anti-money laundering and combating of financing terrorism standards on the de-risking behavior of banks and loss of correspondent banking relationships in many developing countries. We call on the IMF, the World Bank, and the Financial Stability Board to develop appropriate guidance on how to properly implement the risk-based approach rather than seeking to avoid money laundering and financing terrorism risks by wholesale termination of entire classes of customers through de-risking, which contributes to financial exclusion.

12. In order to address incentives for holdout behavior that seriously undermines sovereign debt restructuring processes, we recognize as positive steps the sustained progress with regards to the contractual provisions for debt issuance as well as the recent passage by the U.N. General Assembly of the resolution on the Basic Principles on Sovereign Debt Restructuring Processes. We also encourage sovereign issuers to include enhanced Collective Action Clauses and the modified pari passu clauses.

13. We look forward to the outcomes of U.N. Framework Convention on Climate Change’s 21st Conference of the Parties (COP21). We stress the importance of incorporating environmental sustainability into growth and development strategies, while respecting the principle of common but differentiated responsibilities.

Governance and Reform of International Financial Institutions
14. We reiterate our deep disappointment with the lack of progress in implementing the IMF quota and governance reforms agreed to in 2010 and strongly urge the U.S. to complete ratification. This remains an impediment to IMF credibility, legitimacy, and effectiveness and has considerably delayed forward-looking commitments, namely, a new quota formula and the 15th General Review of Quotas. Implementing the 2010 reforms remains our key priority. Nevertheless, we believe that a decision to de-link quota reform from the Board reform amendment, which is the element of the 2010 reforms that requires ratification by the U.S. Congress, would be the preferred option in the interim, as it increases IMF resources and also realigns quotas to reflect the increased economic weight of EMDCs. The alternative option, interim ad hoc increases, can, if properly designed, achieve meaningful progress towards the shifts in representation under the 2010 reforms, although it would increase IMF quota resources only marginally. It is important that any interim measures be designed so as not to lower incentives to complete the 14th General Review of Quotas.

15. We strongly urge the initiation of the 15th General Review of Quotas, including a new quota formula, without further delays, with a view to meet the December 2015 deadline, as mandated under the Articles of Agreement. We urge that quota reforms at the IMF protect the quota share of low income countries. We reiterate our longstanding call for a third Chair for Sub-Saharan Africa on the IMF Executive Board, provided this does not come at the expense of other EMDCs’ Chairs.

16. We note the 2015 Shareholding Review of the World Bank, including the proposed roadmap. We call for a timely agreement on a dynamic formula for future shareholding realignment and stress that any such formula must meaningfully increase the voting power of developing countries and move towards equitable voting power, while protecting the voting power of the smallest poor countries. Through the shareholding review, we also call for the strengthening of the WBG’s responsiveness to the developing countries and the increase of the developing countries’ voice and representation in the Bank’s Executive Board.

17. We note the ongoing work on the review of the World Bank’s safeguard framework. We underscore that the framework should give a greater role to the use of country systems and effectively address the concerns of the borrower countries. Additionally, the consultations should consider the implementability of standards and their implications in terms of cost and time. We call on the Bank to allocate the resources necessary to assist in building countries’ capacity to implement the forthcoming safeguards framework. We welcome the Bank’s new procurement guidelines and call on the WB to build capacities in client countries to support implementation of the guidelines.

18. Finally, we reiterate our call for concrete efforts towards greater representation by nationals from under-represented regions and countries in the form of recruitment and career progression to achieve balanced regional representation in the WBG and the IMF. We reiterate the importance of staff diversity and gender balance at all levels, including diversity of educational institutions and background as well as experiences.

Other Matters
19. We thank Lebanon for its Chairmanship of the Group and welcome Colombia as the incoming Chair. We also welcome Sri Lanka as the Second Vice-Chair. The next meeting of the G-24 Ministers is expected to take place on April 14, 2016 in Washington, D.C.

LIST OF PARTICIPANTS1
Ministers of the Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development held their ninety-fourth meeting in Lima on October 8, 2015 with Alain Bifani, Director-General of the Ministry of Finance of Lebanon in the Chair; Mauricio Cárdenas, Minister of Finance and Public Credit of Colombia as First Vice-Chair; and Sufian Ahmed, Minister of Finance and Economic Development of Ethiopia as Second Vice-Chair.
The meeting of the Ministers was preceded on October 7, 2015 by the one hundred and sixth meeting of the Deputies of the Group of Twenty-Four, with Alain Bifani, Director-General of the Ministry of Finance of Lebanon, as Chair.

African Group: Abderrahman Benkhalfa, Algeria; Nialé Kaba, Côte d’Ivoire; Mutombo Mwana Nyembo, Democratic Republic of Congo; Hazem El Beblawi, Egypt; Teklewold Atnafu, Ethiopia; Regis Immungault, Gabon; Henry A. K. Wampah, Ghana; A.M. Daniel Nwaobia, Nigeria; Nhlanhla Nene, South Africa.
Asian Group: Arun Jaitley, India; Gholamali Kamyab, Islamic Republic of Iran; Wassim Manssouri, Lebanon; Ashraf Wathra, Pakistan; Cesar V. Purisima, Philippines; Ravi Karunanayane, Sri Lanka; Maya Choueiri, Syrian Arab Republic.

Latin American Group: Axel Kicillof, Argentina; Antonio Silveira, Brazil; Ximena Cadena, Colombia; Oscar Monterroso, Guatemala; Rodrigo Turrent, Mexico; Julio Velarde, Peru; Sandra Fraser, Trinidad and Tobago; Jose Rojas, Venezuela.

Observers: Abdulrahman Al Hamidy, Arab Monetary Fund; Shaolin Yang, China; Jose Manuel Salazar, ILO; Savas Alpay, IsDB; Abderrahim Bouazza, Morocco; Suleiman Alherbish, OFID; Hojatollah Ghanimi Fard, OPEC; Mohammed Al Zaben, Saudi Arabia; Alexander Trepelkov, UNDESA; Inés Bústillo, UNECLAC; Deodat Maharaj, The Commonwealth.

Special Guests: Christine Lagarde, Managing Director, International Monetary Fund
Jim Yong Kim, President, World Bank
G-24 Secretariat: Marilou Uy, Natalia Speer, Shichao Zhou, Lana Bleik
IMF Secretariat for the G-24: Maria Guerra Bradford, Dalila Bendourou

Iceland today repaid, ahead of schedule, all of its remaining obligations to the International Monetary Fund (IMF), amounting to SDR 236.9 million (about US$334 million).

The single repurchase today consolidates 11 separate repurchases that would otherwise have fallen due between October 14, 2015 and August 31, 2016. The obligations were contracted under the Stand-By Arrangement approved by the IMF’s Executive Board on November 19, 2008, under which Iceland borrowed a total of SDR 1.4 billion (about US$2.1 billion at the time of approval) from the IMF (see Press Release 08/296).

From the IMF-World Bank Annual Meetings in Lima, Peru, Christine Lagarde, the Managing Director of the IMF said, “This early repayment by Iceland marks a successful end to an intensive engagement with the Fund that began in the midst of a deep financial crisis. The IMF looks forward to continuing a close and constructive relationship with the Icelandic authorities.”

The repayment brings to an end the IMF’s Post-Program Monitoring of Iceland. The Executive Board last met to discuss Iceland on June 24, 2015 when it considered the Sixth Post-Program Monitoring Discussion (see Press Release 15/299). Subsequently, an IMF staff team visited Reykjavik in late September to be updated on recent economic developments, including progress in implementing the authorities’ capital account liberalization strategy.

ST. LOUIS, MO. A majority of investors have taken advantage of low interest rates, according to the third quarter Wells Fargo/Gallup Investor and Retirement Optimism Index survey. The survey of 1,006 U.S. investors was conducted August 7-16; the median age of the retired investors is 70 and the non-retired is 45.

Six in 10 investors (58%) are benefiting from lower rates either by taking out a car loan (30%), refinancing an existing mortgage or home finance loan (17%), taking out a mortgage for a new home (16%), obtaining a student loan for themselves or a family member (9%), or taking out another type of loan (10%) over the past two years. Half of investors say they are very or somewhat likely to take out a loan in the near future in anticipation that rates may go up.

“Investors found a variety of ways to benefit from the low interest rate environment, but this may be a good time for them to revisit their investment strategies and make sure they’re properly diversified to benefit in a rising rate environment as well,” Bob Vorlop, Head of Products and Advice at Wells Fargo Advisors said. “Those nearing retirement and retirees may be able to take some risk off the table in their portfolios.”

Interestingly, forty-four percent of investors say they would make major adjustments to their investment strategy if interest rates rise. The most common action investors anticipate making is buying more stocks (30%), while just 8% say they would reduce their stock holdings. About a quarter (23%) say they would buy bonds or other fixed income investments, whereas 10% say they would sell these types of instruments.

“In a complex market environment, interest rates changes are yet another factor that can be unsettling to investors, but one of the most important roles a financial advisor can play is to design portfolios that can meet investors’ objectives under a variety of circumstances,” Vorlop said. “That can be a tremendous source of comfort and confidence to investors,” he added.

Investor Optimism Index Slips
Even before the steep slide in stocks in late August, the Wells Fargo/Gallup Investor and Retirement Optimism Index showed investor confidence slipping 12 points to +58, from its seven-year high of +70 last quarter. The drop in optimism was attributed to non-retirees, whose index score was down 17 points to +53 versus +70 in May. This was driven more by mounting concerns about the economy – particularly the stock market and inflation – rather than their ability to reach personal financial goals. Retiree optimism held steady at +70, similar to +67 in May.

“While investors couldn’t have predicted the timing of the market volatility, the wide market swings in late August underscored the importance of having a diversified portfolio that helps to shield them from the rollercoaster rides that can occur in the stock market from time to time,” added Vorlop.

Investors Caught Off Guard by August Stock Market Correction

Prior to last month’s market volatility, investors weighed in on their outlook for the stock market. Overall, investors felt the market would either continue to go up (30%) or hold steady (41%); only 26% expected it to start going down. Additionally, more than half of investors, (53%) said it was a good time to invest in the stock market and 41% of this group said their main reason for believing this is that they expected the market to continue to rise. On the flip side, 41% of investors thought it was a bad time to invest, with the majority citing market volatility.

When investors were asked about specific issues that could affect the investment climate in the U.S., the issues most likely to be seen as very harmful were taxes (46%), unemployment (43%), and the threat of cyberattacks (42%). Only 20% of investors in August believed China’s economic slowdown was hurting the investment climate a lot while 42% said it was hurting it a little.

Written Financial Plans Include Debt Management
The survey underscores the important role that a written financial plan can play in helping investors meet their financial goals. Just over a third of non-retired investors (36%) say they have a written financial plan, and of these 45% are highly confident that their plan is adequately designed to ensure they reach their financial goals. Slightly more retired investors have a written plan (45%), and a somewhat higher share, (53%) are highly confident it is adequately designed to achieve their financial goals.

More than half of non-retired investors with a written plan (56%) and 44% of retired investors with a written plan say their plan includes debt management.

“To be truly comprehensive, a plan should take into account essential elements that can help investors reach their financial goals, including both investment and debt strategies. Putting that plan in writing with the help of a professional financial advisor can often be the catalyst to important changes investors can make in pursuit of a brighter financial future,” Vorlop said.

Investors Trim Their Debts
Two- thirds of all investors have been consciously reducing their debt. While three-quarters of investors — including 83% of non-retired investors and 54% of retired investors — have some type of debt, most (89%) say they have made some effort to reduce their debt. Among investors who carry debt, nearly half (46%) say the amount of debt they are carrying has decreased in the past two years, while 31% say it has increased and 23%, say their debt load has stayed the same. Among all investors, debts include either a mortgage (53%), a credit card balance that carries over from month to month (37%), a car loan (35%), a student loan (23%) or another outstanding debt or loan (12%).

Seven in 10 investors who say they made an effort to trim debt feel they have been successful in reducing their debt as much as they had hoped. However, 62% say they intend to make a major effort in the future to reduce their debt.

Debt-free Retirement?
In the same vein, the slight majority of all investors (56%) say it is critically important for them to be debt-free in retirement. Another 36% say this is important but not critical while 8% say it is not too important or not at all important. The slight majority (55%) also believe it is “very possible” for them to be debt-free in retirement; 37% say it is somewhat possible and 8% not possible.

Despite these indications that investors would prefer to be debt-free, the vast majority – 70% — see debt as necessary and acceptable if used sparingly. Just 13% believe any amount of debt is bad and should be avoided while 14% view debt as valuable tool for leveraging money that should be taken advantage of. While views on this are similar by retirement status, they differ somewhat by asset class with investors with $100,000 or more in assets much more likely than lower asset investors to view debt as a powerful tool, 20% vs. 6%.

Social Security
Non-retired investors are generally doubtful they will receive their full benefit from Social Security when they retire: 52% say it is not too or not at all likely the system will be able to pay them their full benefit. And while another 31% say it is somewhat likely, just 15% believe it is very likely.

As a result, most non-retirees are not counting on their Social Security benefit to be a major source of income when they retire. Fifty-eight percent say it will be a minor income source and 14% not a source at all. Just 26% expect it to be a major income source for them. This contrasts sharply with current retirees, 42% of whom describe their Social Security benefit as a major income source and 37% as a minor source.

About the Wells Fargo/Gallup Investor and Retirement Optimism Index
These findings are part of the Wells Fargo/Gallup Investor and Retirement Optimism Index, which was conducted August 7-16, 2015, by telephone. The Index includes 1,006 investors randomly selected from across the country with a margin of sampling error is +/- four percentage points. For this study, the American investor is defined as an adult in a household with total savings and investments of $10,000 or more. About two in five American households have at least $10,000 in savings and investments. The sample size is comprised of 74% non-retired and 26% retirees. Of total respondents, 45% reported annual income of less than $90,000 and 55% of $90,000 or more. The Wells Fargo/Gallup Investor and Retirement Index is an enhanced version of Gallup’s Index of Investor Optimism that provides its historical data. The median age of the non-retired investor is 45 and the retiree is 70.

The Index had a baseline score of 124 when it was established in October 1996. It peaked at 178 in January 2000, at the height of the dot-com boom, and hit a low of negative 64 in February 2009.

About Wells Fargo(Twitter @WellsFargo)
Wells Fargo & Company (NYSE: WFC) is a nationwide, diversified, community-based financial services company with $1.7 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through 8,700 locations, 12,800 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 36 countries to support customers who conduct business in the global economy. With approximately 266,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 30 on Fortune’s 2015 rankings of America’s largest corporations. Wells Fargo’s vision is to satisfy all our customers’ financial needs and help them succeed financially. Wells Fargo perspectives are also available at Wells Fargo Blogs and Wells Fargo Stories.

About Gallup
For more than 70 years, Gallup has been a recognized leader in the measurement and analysis of people’s attitudes, opinions, and behavior. While best known for the Gallup Poll, founded in 1935, Gallup’s current activities consist largely of providing marketing and management research, advisory services and education to the world’s largest corporations and institutions.

Information received since the Federal Open Market Committee met in July suggests that economic activity is expanding at a moderate pace. Household spending and business fixed investment have been increasing moderately, and the housing sector has improved further; however, net exports have been soft. The labor market continued to improve, with solid job gains and declining unemployment. On balance, labor market indicators show that underutilization of labor resources has diminished since early this year. Inflation has continued to run below the Committee’s longer-run objective, partly reflecting declines in energy prices and in prices of non-energy imports. Market-based measures of inflation compensation moved lower; survey-based measures of longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term. Nonetheless, the Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators continuing to move toward levels the Committee judges consistent with its dual mandate. The Committee continues to see the risks to the outlook for economic activity and the labor market as nearly balanced but is monitoring developments abroad. Inflation is anticipated to remain near its recent low level in the near term but the Committee expects inflation to rise gradually toward 2 percent over the medium term as the labor market improves further and the transitory effects of declines in energy and import prices dissipate. The Committee continues to monitor inflation developments closely.

To support continued progress toward maximum employment and price stability, the Committee today reaffirmed its view that the current 0 to 1/4 percent target range for the federal funds rate remains appropriate. In determining how long to maintain this target range, the Committee will assess progress–both realized and expected–toward its objectives of maximum employment and 2 percent inflation. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments. The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.

The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. This policy, by keeping the Committee’s holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions.

When the Committee decides to begin to remove policy accommodation, it will take a balanced approach consistent with its longer-run goals of maximum employment and inflation of 2 percent. The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.

Voting for the FOMC monetary policy action were: Janet L. Yellen, Chair; William C. Dudley, Vice Chairman; Lael Brainard; Charles L. Evans; Stanley Fischer; Dennis P. Lockhart; Jerome H. Powell; Daniel K. Tarullo; and John C. Williams. Voting against the action was Jeffrey M. Lacker, who preferred to raise the target range for the federal funds rate by 25 basis points at this meeting.

The Bank of England’s Monetary Policy Committee (MPC) sets monetary policy in order to meet the 2% inflation target and in a way that helps to sustain growth and employment. At its meeting ending on 9 September 2015, the MPC voted by a majority of 8-1 to maintain Bank Rate at 0.5%. The Committee voted unanimously to maintain the stock of purchased assets financed by the issuance of central bank reserves at £375 billion.

Twelve-month CPI inflation rose slightly to 0.1% in July but remains well below the 2% target rate. Around three quarters of the gap between inflation and the target reflects unusually low contributions from energy, food, and other imported goods prices. The remaining quarter reflects the past weakness of domestic cost growth, and unit labour costs in particular. Although pay growth has recovered somewhat since the turn of the year, the recent increase in productivity means that the annual rate of growth in unit wage costs is currently around 1% – lower than would be consistent with meeting the inflation target in the medium term, were it to persist. Additionally, sterling’s appreciation since mid-2013 is having a continuing impact on the prices of imported goods. A combination of these factors has meant that the average of a range of measures of core inflation remains subdued, although it picked up slightly in July to a little over 1%.

Inflation is below the target and the Committee’s best collective judgement is that there remain at least some underutilised resources in the economy. In that light, the Committee intends to set monetary policy in order to ensure that growth is sufficient to absorb the remaining economic slack so as to return inflation to the target within two years.

The Committee set out its most recent detailed assessment of the economic outlook in the August Inflation Report. The aim of returning inflation to the target within two years was thought likely to be achieved conditional upon Bank Rate following the gently rising path implied by the market yields prevailing at the time. Private domestic demand growth was forecast to be robust enough to eliminate the margin of spare capacity over the next year or so, despite the continuing fiscal consolidation and modest global growth. And that, in turn, was expected to result in the increase in domestic costs needed to return inflation to the target in the medium term, as the temporary negative impact on inflation of lower energy, food and import prices waned. In the third year of the projection, inflation was forecast to move slightly above the target as sustained growth led to a margin of excess demand.

The Committee noted in the August Report that the risks to the growth outlook were skewed moderately to the downside, in part reflecting risks to activity in the euro area and China. Developments since then have increased the risks to prospects in China, as well as to other emerging economies. This led to markedly higher volatility in commodity prices and global financial markets.

While these developments have the potential to add to the global headwinds to UK growth and inflation, they must be weighed against the prospects for a continued healthy domestic expansion. Domestic momentum is being underpinned by robust real income growth, supportive credit conditions, and elevated business and consumer confidence. The rate of unemployment has fallen by over 2 percentage points since the middle of 2013, although that decline has levelled off more recently. Global developments do not as yet appear sufficient to alter materially the central outlook described in the August Report, but the greater downside risks to the global environment merit close monitoring for any impact on domestic economic activity.

There remains a range of views among MPC members about the balance of risks to inflation relative to the target. At the Committee’s meeting ending on 9 September the majority of members judged that the current stance of monetary policy remained appropriate. Ian McCafferty preferred to increase Bank Rate by 25 basis points, given his view that building domestic cost pressures would otherwise be likely to lead to inflation overshooting the target in the medium term.

All members agree that, given the likely persistence of the headwinds weighing on the economy, when Bank Rate does begin to rise, it is expected to do so more gradually and to a lower level than in recent cycles. This guidance is an expectation, not a promise. The actual path that Bank Rate will follow over the next few years will depend on the economic circumstances.

After falling for five consecutive months, real gross domestic product rose 0.5% in June. The increase in June was broad based, led by mining, quarrying, and oil and gas extraction and, to a lesser extent, wholesale trade, the finance and insurance sector as well as arts and entertainment.

Following five consecutive monthly declines, the output of goods-producing industries advanced 0.9% in June, primarily as a result of an increase in mining, quarrying, and oil and gas extraction. Manufacturing, the agriculture and forestry sector and utilities were also up. In contrast, construction was down.

The output of service-producing industries increased 0.3% in June, following no growth in May. Gains were notable in wholesale trade, the finance and insurance sector, the arts and entertainment sector and the public sector (education, health and public administration combined). On the other hand, retail trade was unchanged and administrative services edged down.

Mining, quarrying, and oil and gas extraction expands
Following seven consecutive monthly contractions, mining, quarrying, and oil and gas extraction expanded 3.1% in June.

Oil and gas extraction grew 3.9% in June, after declining 3.5% in April and 0.5% in May. The increase in June was mainly the result of a 9.4% gain in non-conventional oil extraction. Non-conventional oil extraction rebounded in June from maintenance shutdowns and production difficulties in April and May. Conventional oil and gas extraction was unchanged in June.

Chart 2 Chart 2: Oil and gas extraction expands in June
Oil and gas extraction expands in June

Chart 2: Oil and gas extraction expands in June
Mining and quarrying (excluding oil and gas extraction) increased 2.6% in June. Metal ore, coal and non-metallic mineral mining all advanced in June.

Support activities for mining and oil and gas extraction decreased 2.7%, after rising 4.6% in April and 1.9% in May.

Wholesale trade rises while retail trade is unchanged
Following a 1.6% increase in April and a 1.1% decline in May, wholesale trade rose 1.0% in June. Increases were notable in wholesaling of personal and household goods, motor vehicles and parts, machinery, equipment and parts as well as building materials and supplies. Conversely, activities at miscellaneous wholesalers, which include agricultural supplies, were down.

Retail trade was unchanged in June, after increasing 0.4% in May. There was increased activity at electronics and appliance stores as well as food and beverage stores in June. On the other hand, declines were posted at building materials and garden equipment and supplies dealers and at clothing and clothing accessories stores.

The finance and insurance sector expands
The finance and insurance sector expanded 0.7% in June, mainly as a result of increases in banking services and, to a lesser extent, financial investment services. In contrast, insurance services were down.

The arts and entertainment sector increases
The arts and entertainment sector increased 6.4% in June, mainly as a result of the FIFA Women’s Soccer World Cup that was hosted by Canada.

Manufacturing output grows
Following a 1.6% contraction in May, manufacturing output grew 0.4% in June.

Non-durable goods manufacturing advanced 0.9% in June, primarily because of increases in the manufacturing of chemical, food and textile, clothing and leather products. In contrast, decreases were posted in petroleum and coal product manufacturing, plastic and rubber product manufacturing and, to a lesser degree, beverage and tobacco manufacturing.

Durable-goods manufacturing was unchanged in June. Notable decreases were recorded in fabricated metal products, machinery, and primary metal manufacturing. On the other hand, miscellaneous manufacturing, computer and electronic product manufacturing, as well as wood product and non-metallic mineral products manufacturing were up.

Construction declines
Construction fell 0.6% in June. Residential and non-residential building and repair construction were down in June, while engineering construction edged up.

The output of real estate agents and brokers declined in June, after rising for four consecutive months.

Other industries
The public sector (education, health and public administration combined) edged up 0.1% in June. Increases in education services outweighed declines in public administration.

Utilities edged up 0.1% in June, after declining for three consecutive months. Natural gas distribution was up in June, while electricity generation, transmission and distribution was down.

Global investors have shifted their attention from Greece to China amid continued concern of a Chinese recession, according to the BofA Merrill Lynch Fund Manager Survey for August. Respondents are scaling back their expectations for economic growth.

• China recession is now rated the number one “tail risk” by 52 percent of panel.
• Fifty-three percent of investors say the global economy will strengthen in coming year, down from 61 percent in July.
• The survey reports the lowest allocations to emerging markets equities since April 2001 and to the Energy sector since February 2002.
• More investors say Global Emerging Markets is the region they most want to underweight; Europe is the region they most want to overweight.
• The survey notes a rising consensus that the Fed will raise rates in third quarter; the majority of panel now expects the yield curve to flatten in next 12 months.
• An anti-commodities stance is evident with moves out of Energy and Materials, while defensive weightings increase.

“Investors are sending a clear message that they are positioned for lower growth in China and emerging markets,” said Michael Hartnett, chief investment strategist at BofA Merrill Lynch Global Research.

“European stocks remain in favour – but investors like domestically focused names and are avoiding anything exposed to China or commodities,” said James Barty, head of European equity strategy.

Fund Manager Survey
An overall total of 202 panelists with US$574 billion of assets under management participated in the survey from 7 August to 13 August 2015. A total of 162 managers, managing US$449 billion, participated in the global survey. A total of 100 managers, managing US$224 billion, participated in the regional surveys. The survey was conducted by BofA Merrill Lynch Global Research with the help of market research company TNS. Through its international network in more than 50 countries, TNS provides market information services in over 80 countries to national and multi-national organizations. It is ranked as the fourth-largest market information group in the world.

BofA Merrill Lynch Global Research
The BofA Merrill Lynch Global Research franchise covers almost 3,400 stocks and 1,200 credits globally and ranks in the top tier in many external surveys. Most recently, the group was named Top Global Research Firm of 2014 by Institutional Investor magazine; No. 1 in the 2015 Institutional Investor Latin America survey; No. 1 in the Institutional Investor 2015 Emerging EMEA Survey; No. 2 in the 2015 Institutional Investor All-Asia survey; and No. 2 in the 2015 All-America Fixed Income survey for the fourth consecutive year. The group was also named No. 2 in the 2014 Institutional Investor All-America survey and No. 2 in the 2014 All-China survey.

Bank of America
Bank of America is one of the world’s leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 48 million consumer and small business relationships with approximately 4,800 retail financial centers, approximately 16,000 ATMs, and award-winning online banking with 31 million active users and approximately 18 million mobile users. Bank of America is among the world’s leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in all 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico and more than 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.

Bank of America Merrill Lynch is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated, which is a registered broker-dealer and a member of FINRA and SIPC, and, in other jurisdictions, locally registered entities. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured * May Lose Value * Are Not Bank Guaranteed.

While companies around the world are taking note of the growing emergence of mobile and digital payment applications, many treasury departments still grapple with the continued existence and enormous cost of paper payments. Clients at the Bank of America Merrill Lynch Conference on Payments and Commercial Card continued to identify that fully converting their payments to electronic was their No. 1 priority in improving their working capital in 2015. The second-highest priority was expanding their card program or adopting mobile/digital business-to-consumer payments. These and other findings were revealed during the two-day event recently held in Phoenix.

“We are facing dramatic shifts in the global payments environment,” said Kevin Phalen, head of Global Card and Comprehensive Payables at BofA Merrill. “As an advisor and service provider to more than 73 percent of treasury departments of the Global Fortune 500, we take our role as facilitator seriously. We hope the dialogue generated among our clients and other industry participants will go some way to advancing preparedness and efficiencies in global commerce,” added Phalen.

This year’s conference, themed “Pay Everywhere: Extending Your Reach,” drew 300 representatives from 175 companies and government agencies based in Asia Pacific, Europe, Latin America and North America. The program featured BofA Merrill experts and other senior industry leaders who spoke on a range of topics, such as how companies can globalize their card programs; new and anticipated innovations in mobile technology; and analyses of regulatory changes impacting payments and cards.

Industry speakers included:
• Wayne Best, global economist, Visa, who gave the keynote speech
• James Carroll, SVP – Innovation, MasterCard
• Karen Webster, CEO, Market Platform Dynamics and founder of PYMNTS.COM

During the event, a number of questions were posed to audience members, generating dialogue among attendees about their respective opportunities and challenges. Notably, 50 percent of attendees said they had a formal payments strategy supported by senior management. And while many clients said that a mobile strategy was not their top priority in 2015, 60 percent did acknowledge that adopting a mobile payments application was something they were likely to introduce in the future. Furthermore, mobile communications are increasingly important to clients, with more than 50 percent of attendees saying mobile alert messaging was “extremely valuable” for their cardholders.

“We were extremely pleased with the outcome of this year’s Payments and Card Conference,” said Ather Williams, head of Global Transaction Services at BofA Merrill. “We’d like to thank our clients and speakers for their active participation and the helpful input they provided. The intelligence we came away with will be invaluable as we determine where to further invest in our platform, and which new capabilities and services will be most beneficial to supporting our clients’ goals.”

Bank of America Merrill Lynch Commercial Card
Bank of America Merrill Lynch is a leading provider of card solutions to large and middle-market companies globally, and to federal, state and local government entities in the United States. BofA Merrill’s Commercial Card group works with these organizations to design integrated ePayments solutions that help unlock working capital while increasing efficiency, visibility and control. As part of the Global Transaction Services business, BofA Merrill’s Commercial Card and Comprehensive Payables group develops strategies and solutions that are closely aligned to the treasury goals of corporate, commercial and government entities. BofA Merrill cardholders can be served in numerous languages and have access to a worldwide network of more than 40 million credit card merchants and ATMs.

Bank of America
Bank of America is one of the world’s leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 48 million consumer and small business relationships with approximately 4,800 retail financial centers, approximately 16,000 ATMs, and award-winning online banking with 31 million active users and approximately 18 million mobile users. Bank of America is among the world’s leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in all 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico and more than 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.

Bank of America Merrill Lynch is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated, which is a registered broker-dealer and member of SIPC, and, in other jurisdictions, a locally registered entity. Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured * May Lose Value * Are Not Bank Guaranteed