Finance
G-7 finance chiefs to check bank risks, supply chains with partners
The finance chiefs of the Group of Seven nations on Friday will discuss ways to protect financial stability from bank runs caused by the widespread use of message apps and online banking and to build resilient supply chains amid China’s dominance over critical products.
On the second day of a meeting through Saturday, the G-7 finance ministers and central bank governors will also discuss climate change. Debt vulnerabilities among developing nations are also on the agenda, in a rare outreach session for the finance track with six nations such as Brazil, India and South Korea.
As chair of the G-7, Japan is aiming to set a clear schedule for the launch of a “mutually beneficial” partnership with low and mid-income nations to build robust supply chains for critical products for decarbonization.
The finance chiefs’ talks lay the groundwork for their leaders’ summit next week in Hiroshima where they are expected to stand firm against Russia’s war on Ukraine and China’s assertiveness.
“It’s become clear that financial worriers can spread in an instant via social networking sites, and online banking, which allows money withdrawals outside business hours, can cause bank runs,” Japanese Finance Minister Shunichi Suzuki said Thursday.
He stressed the need to share the lessons learned from recent bank failures in the United States.
The G-7 has stressed that the financial system is sound despite bank woes first triggered by the collapse of Silicon Valley Bank. It was followed by other lenders Signature Bank and First Republic Bank.
Adding to market anxiety is the risk of a U.S. default amid gridlock over the debt limit. U.S. Treasury Secretary Janet Yellen said a default will produce “an economic and financial catastrophe.”
Besides Japan and the United States, the G-7 includes Britain, Canada, France, Germany and Italy plus the European Union.
Japanese Finance Minister Shunichi Suzuki (R) and Bank of Japan Governor Kazuo Ueda attend the first day of three-day talks between Group of Seven member states’ finance ministers and central bank governors in Niigata, northwest of Tokyo, on May 11, 2023. (Pool photo) (Kyodo) ==Kyodo
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