The meeting of finance ministers and central bank governors of the seven major countries (G7) will open in Niigata City on the evening of the 11th for three days. Regarding the global economy, which is the focus of the first day, we will discuss the impact of financial instability originating in the United States and Europe on the global economy, as well as measures to support Ukraine and circumvent sanctions against Russia.
At a press conference just before the opening, Finance Minister Shunichi Suzuki said, “At this meeting, I would like to further strengthen the unity of the G7 and accelerate international cooperation to overcome the difficulties of the global economy.” .
The failures of Silicon Valley Bank (SVB) and Signature Bank in March, including the acquisition of Credit Suisse Group Inc., sparked concerns about financial stability. Even in May, the US First Republic BankCredit uncertainty is smoldering, such as bankruptcy.
The logo of the G7 finance ministers and central bank governors meeting painted on the stairs in Niigata city
Photographer: Kiyoshi Ota/Bloomberg
Finance Minister Suzuki said, “The environment surrounding the financial sector has changed dramatically,” citing the SNS, which are said to have led to the bankruptcy in the United States, and the spread of Internet banking, which has made it easier for deposits to flow out. I do,” he pointed out. He expressed his recognition that this is a common issue faced by all countries, including Japan. Specific discussions on further strengthening the financial system will be held on the second day.
Bank of Japan Governor Kazuo Ueda told reporters on the same day that the financial system problems in the United States and Europe and the resulting destabilization of the financial markets were, It is a calm movement,” he said. On top of that, at the G7 meeting, he looked back on the movement so far and said, “I would like to confirm what I can confirm through close communication.”
In April, the International Monetary Fund (IMF) downgraded its global growth outlook, citing financial sector stress added to pressure on the global economy from monetary tightening and Russia’s invasion of Ukraine. Central banks’ efforts to contain inflation while maintaining economic growth and the health of the banking system are becoming more complex.
In May, central banks in the United States, Europe and Australia raised their policy rates. However, monetary policy in each country is shifting away from the phase of rapidly raising interest rates to curb inflation. The US Federal Open Market Committee (FOMC) has indicated a temporary suspension of interest rate hikes, while the European Central Bank (ECB) has indicated that it will continue to raise interest rates.
G7 Finance Ministers and Central Bank Governors Meeting to Begin on 11th to Avoid Further Deterioration of Global Economy
Regarding Russia’s invasion of Ukraine, we will discuss measures to improve the effectiveness of sanctions against Russia and additional support measures for Ukraine. “The world economy and household budgets are being hit hard by the invasion of Ukraine,” Finance Minister Suzuki said. He called measures to circumvent sanctions an “important issue,” and said, “I would like to discuss necessary measures in terms of continuing to put pressure on Russia’s ability to wage war.” Ukrainian Finance Minister Marchenko will participate in the discussion online. I would like to try to unite the G7 and include the results in the joint statement.
Finance Minister Suzuki explained, “While confirming the significant results of financial support and IMF (International Monetary Fund) support programs for Ukraine, we will discuss strengthening cooperation with development financial institutions and support for neighboring countries.” Japan’s support for neighboring countries includes the acceptance of Ukrainian refugees, as well as the announcement that JBIC (Japan Bank for International Cooperation) will mobilize 1 billion dollars (approximately 134 billion yen) to promote investment by Japanese companies. I will,” he said.
U.S. Treasury Secretary Yellen announced on the 11th that the U.S. intends to severely curb Russia’s ability to evade sanctions at this meeting, and strongly urged the U.S. to cooperate in strictly enforcing sanctions against Russia. “Further action to thwart Russia’s attempts to evade sanctions is a key pillar of our strategy,” he said.
U.S. Treasury Secretary to propose blocking Russia’s sanctions evasion at G7
Other Statements by Finance Minister Suzuki
- U.S. Treasury Secretary Yellen scheduled to meet on 13th
- G7 will stay out of specific discussions on US debt ceiling
- We want to work together to enable low- and middle-income countries to play a greater role in the supply chain for clean energy-related products.
- Contribute to industrial sophistication and sustainable development in low- and middle-income countries, and underpin global efforts to achieve net zero
- Aiming for an agreement including a clear schedule for the early launch of a new mutually beneficial partnership
(Update with remarks by Finance Minister Suzuki and Bank of Japan Governor Ueda)
2023-05-11 06:55:08
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