G7 countries agreed on Saturday to review banking regulation in the face of shortcomings exposed by recent bankruptcies in the region and opt to diversify supply chains with a view to reducing dependence on China.
At the end of their three-day meeting in the Japanese city of Niigata this Saturday, finance ministers and central bank governors from the Group of Seven pledged to continue working to guarantee the stability of the financial system in the face of its challenges. Change.
Despite the fact that the G7 is confident that the current financial system is sufficiently robust following the reforms undertaken as a result of the 2008 global crisis, it recognizes that the recent turmoil highlights the need to continue monitoring and acting on them. signal. Industry Development.
“We will address gaps in data, supervision and regulation of the banking system,” the Group of Seven said in their joint statement, where they also assured that “appropriate measures will be taken to maintain financial stability”. without specifying further. ,
Banking reform was not initially on the meeting’s agenda, but the collapse of several financial institutions, including US Silicon Valley Bank and Switzerland’s Credit Suisse, led the Japanese chairmanship of the group to push for the issue.
The G7 has studied “lessons learned” from these episodes and strengthened financial security as a priority, including analyzing “vulnerabilities in non-bank financial intermediation” and setting standards in its regulation.
Diversify Supply Providers
“We recognize the urgent need to address existing vulnerabilities within highly concentrated supply chains” in some countries for key products, the partners sought to open a dialogue with emerging powers that could become global suppliers.
Although the document does not explicitly mention the country, with this diversification the G7 seeks to end China’s dominance as a source of components and materials of strategic importance, and whose dependence has been evident in supply chain disruptions during the pandemic. Was.
The partners believe that “diversification of supply chains can contribute to the safeguarding of energy security and help maintain macroeconomic stability”, and in this regard announced an initiative with external partners that will be implemented during the year. About to start till the end.
The main objective of the initiative is to involve emerging economies in the project so that they “play a greater role under a mutually beneficial association”, Japanese Finance Minister Shunichi Suzuki said at a press conference after the forum.
Solve debt problems
To engage these third countries in the dialogue, the Japanese presidency extended an unusual invitation to the ministers of India, Brazil, Indonesia and Comoros, the rotating presidency of the African Union, to meet on the occasion.
To achieve greater integration of the lowest-income countries and promote their development, the G7 called for multilateral exploration and resolution of the debt problems that affect them, exacerbated by inflation and the Russo-Ukrainian war. Has happened.
The group’s position seeking greater rapprochement with these countries has once again been interpreted as a movement to counter Beijing’s growing influence in those regions through investment and financing of public debt.
Minister Suzuki also said that broadly, the partners broadly agreed to “improve the transparency and accuracy of debt data”, a point that received particular attention during the meeting amid US debt ceiling issues.
Support for ukraine
The G7 countries once again reaffirmed their commitment to support Kiev, this time through their finance representatives.
“Progress has been made in terms of extending financial support going forward,” said the Japanese head of industry.
The statement said the G7 would “continue to meet Ukraine’s short-term financing needs” and “support joint efforts to repair its critical infrastructure”.
The text affirms Russia’s willingness to impose sanctions and other measures to “reduce its ability to wage war” and “to counter any attempts to evade these punitive actions”, and to avoid the adoption of additional measures. does not deny.
