G7 finance secretaries will discuss on Friday how to safeguard financial stability from bank runs caused by the proliferation of messaging apps and online banking, and build resilient supply chains as China dominates critical products.
G7 finance ministers and central bank governors will also discuss climate change on the second day of the meeting, which runs through Saturday. Debt vulnerabilities in developing countries were also on the agenda during an unusual outreach session for the financial sector with six countries, including Brazil, India and South Korea.
As the G7 Presidency, Japan should set a clear timeline for launching “mutually beneficial” partnerships with low- and middle-income countries to build robust supply chains for products critical to decarbonisation. want to be.
The meeting between the finance ministers will lay the groundwork for next week’s summit in Hiroshima, where they are expected to take a firm stand against Russia’s war on Ukraine and China’s hardline stance.
Finance Minister Shunichi Suzuki said on Thursday that “financial concerns spread quickly through social networking sites, and it became clear that online banking, which allows people to withdraw money after hours, could lead to bank runs.” .
He stressed the need to share lessons learned from the recent US bank failures.
The G7 stressed that the financial system is sound despite the banking crisis triggered by the failure of the Silicon Valley Bank. Other financial institutions, Signature Bank and First Republic Bank, followed suit.
Fueling market anxiety is the risk of the U.S. defaulting on its debt amid the debt ceiling deadlock. U.S. Treasury Secretary Janet Yellen said a default would cause an “economic and financial catastrophe.”
The G7 includes Japan, the United States, the United Kingdom, Canada, France, Germany, Italy, and the European Union.
Japan’s Finance Minister Shunichi Suzuki (Republican) and the Bank of Japan attend the first day of a three-day meeting between G7 finance ministers and central bank governors in Niigata, northwest of Tokyo, May 11, 2023. President Kazuo Ueda. (Pool photo) (Kyodo) == Kyodo
G7 Finance Ministers Discuss Banking Issues, Ukraine, New Risks
Profiles of Leaders Attending the G7 Summit
Japan Disputes Headline of Time’s Kishida Interview