G7 Finance Ministers Pledge to ‘Take Action’ to Stabilize Global Financial System

By Shota Mizuno and Yasuhiro Kobayashi / Yomiuri Shimbun Staff Writers

16:54 JST, April 13, 2023

WASHINGTON — G7 finance ministers and central bank governors adopted Wednesday a joint statement pledging to “stand ready to take appropriate actions to maintain the stability and resilience of the global financial system,” in the face of a spate of bankruptcies of midsize U.S. banks and the financial crisis at giant Credit Suisse.

The statement, adopted at the G7 Finance Ministers and Central Bank Governors’ Meeting in Washington, also included a policy of enhancing supply chains with a view to countering China.

“Recent financial sector developments highlight the uncertainty about the global economic outlook and the need to stay vigilant,” the statement said.

At a press conference following the meeting, Finance Minister Shunichi Suzuki emphasized, “We shared the view that the financial system is resilient thanks to regulatory reforms implemented after the 2008 financial crisis.”

The statement said Russia’s aggression against Ukraine is contributing to inflationary pressure, heightening food and energy insecurity. The G7 reaffirmed “unwavering support for Ukraine and unity in our condemnation of Russia’s war of aggression” and would impose sanctions and “take further actions as needed.”

As this year’s G7 chair, Japan intends to hold discussions with relevant nations in preparation for the upcoming summit in Hiroshima in May. The G7 groups Japan, Canada, France, Germany, Italy, the United Kingdom, the United States and the European Union.

From the perspective of economic security, G7 finance ministers intend to reinforce the supply chain of important products for clean energy. In light of the current situation in which the manufacture of solar panels and batteries for electric vehicles is heavily concentrated in China, the statement set forth the intention to “support low- and middle-income countries to play bigger roles in supply chains and enhance their value addition.”

“Considering security,” Suzuki said, “it is undesirable for supply chains to be excessively concentrated in one country.”

Also kicking off Wednesday in Washington was the two-day G20 Finance Ministers and Central Bank Governors’ Meeting. Japan will take the lead in discussing a new debt restructuring framework for crisis-hit Sri Lanka.

Bank of Japan Gov. Kazuo Ueda, who took office Sunday, is expected to inform participating nations that the BOJ will continue its policy of large-scale monetary easing.