Full coverage: G20 Hangzhou Summit

Global financial governance is one of the four major issues China has set for the upcoming G20 summit in Hangzhou. World leaders will discuss a variety of issues and experts say governance will be an important topic.

This became an important topic after the 2008 financial crisis and during the 2009 London G20, leaders agreed to establish a committee called the Financial Stability Board. The board is dedicated to promoting institutional oversight, warning against potential financial disorder globally and finding ways to address the problems.

But many say that that isn't enough. Here's why this year's G20 in Hangzhou is important for global finance. I've talked to financial experts about just what more needs to be done.

China's stock market turbulence late last year remains a fresh and painful memory to many. Experts say that as China's financial markets become more international, additional work needs to be done to limit the ramifications of stock fluctuations on the global economy. That is where global financial governance comes in.

"Global governments need to find agreements on how to regulate them. So they have to define standards, and ways to regulate them evenly across many countries. So that is an very important topic," said Jurgen Conrad, head of Economics Unit, ADB.

Specific themes concerning the world's central banks will be among the topics discussed during the G20 summit. That's as the US federal reserve considers a possible interest rate hike later this year.

The Fed's decision could have a significant impact on capital flows in and out of emerging markets. Experts say such decisions make policy coordination among the world's central banks an imperative needed to ensure a stable financial environment. The experts say that's not a job only for governments.

An official with the Asian Development Bank said it's important to boost coordination across international financial institutions such as the IMF and the newly formed Asian Infrastructure Investment Bank.

"Of course there are a number of new financial institutions, so how could the division of labor look across these entities and institutions, how should they cooperate before a crisis and during the crisis," said Jurgen Conrad.

Institutions play a significant role in the global economic system, and their numbers keep growing. Experts say the increased amount of new institutions such as the AIIB reflects the fact that developing countries are gaining a larger say in global financial governance. The experts say those countries also are striving to reform traditional institutions such as the International Monetary Fund.

"China is a leader in representing the emerging market universe in reshaping the Brettonwoods institutions, to give greater voice to emerging markets. The role of the IMF becomes greater as a result of the financial crisis. But the emerging markets like the BRICS, especially China, contributed more to the funding of the IMF. They bought more of the bonds, they issued more seed capital," said Jeremy Stevens, Asia economis of Standard Bank.

Experts say that things are different these days. What once were seen as orthodox financial rules in developed countries and imposed on emerging markets in the 80s and 90s are now being challenged. The experts say, too, that the economic success of countries like China provides alternatives to the current system and shows that the system needs to upgrade itself.

The stability of global finance is also important because it has a very real impact on global trade and investment. The US dollar has indeed kept the global system stable for a long time. But experts say that things have changed since the 2008 crisis. Countries followed the Fed in devaluing their currencies in order to make their exports cheaper and more competitive.

As a result, the world is in the midst of a new wave of establishing trade and investment barriers to protect domestic businesses. However, experts say that in the long term, nobody will gain from those acts of protectionism. The World Trade Organization was supposed to deal with the problem but negotiations are going nowhere. Countries like China and the US are now instead promoting regional trade and investment agreements such as the RCEP and the TPP.