G7 finance ministers have warned of “increased uncertainty” surrounding the global economy and the need to close regulatory gaps in the banking system in the wake of the financial sector turmoil.
“The global economy has shown resilience against multiple shocks,” finance ministers of the world’s most advanced economies said in their final statement on Saturday after a three-day ministerial meeting in Japan.
“However, we must remain vigilant and remain nimble and flexible in our macroeconomic policy amid heightened uncertainty about the global economic outlook.”
Finance ministers also noted the need to close the banking system’s “data, supervisory and regulatory gaps” that emerged following the March collapses of Silicon Valley Bank and Signature Bank and the bankruptcy of First Republic in recent weeks.
In recent months, the United States and its G7 partners have made closing sanctions loopholes and fighting evasion their priority as, more than a year after Russia full-scale invasion of Ukrainethe appetite for imposing restrictions on new parts of the Russian economy is diminishing.
In this context, finance ministers also agreed to enhance information sharing on possible sanctions evasion and monitor the effectiveness of price caps on Russian crude and petroleum products. “We remain committed to countering any attempts to circumvent and undermine our sanctions measures,” the statement said.
The G7 pledged to provide $44 billion in economic support to Ukraine, agreeing IMF approval of a four-year loan program worth $15.6 billion.
“It was a great achievement for us that the G7 was able to strengthen its unity rather than going our separate ways to address major international challenges,” Shunichi Suzuki, Japan’s finance minister, said on Saturday.
According to people familiar with the discussions, Brussels is also discussing restrictions on some EU exports to countries it suspects are re-exporting sanctioned products to Russia to prevent critical components ending up on the Ukrainian battlefield.
Ahead of the finance ministers meeting, US Treasury Secretary Janet Yellen had required “coordinated action” by G7 nations against Beijing’s use of economic coercion. The G7 agreed to launch a framework for supply chain collaboration in the clean energy sector later this year, but the 14-page document contained no reference to China-related economic security concerns.
Yellen made the comments as Washington finalized a new outward investment screening mechanism targeting China.
A senior Japanese finance ministry official acknowledged that the issue of economic coercion was raised at the meeting but declined to comment on the details and whether China had been mentioned in those discussions.
Following Yellen’s remarks, China’s foreign ministry said on Friday it was “a victim of US economic coercion,” citing sweeping export controls that the US rolled out in October that would severely complicate the efforts of Chinese companies to develop cutting-edge technologies with military applications.
“If any country should be criticized for economic coercion, it should be the United States. The United States has exaggerated the concept of national security, abusing export controls and adopting discriminatory and unfair measures against foreign companies. This seriously violates the principles of market economy and fair competition,” said spokesman Wang Wenbin.
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