G7: finance ministers warn of global uncertainty – 05/13/2023 – Market

G7 finance ministers warned of “growing uncertainty” surrounding the global economy and the need to address regulatory gaps in the banking system following the turmoil in the financial sector.

“The global economy has shown resilience against multiple shocks,” the finance ministers of the world’s most advanced economies said in their final communiqué after a three-day ministerial meeting in Japan on Saturday (13).

“However, we need to remain vigilant, agile and flexible in our macroeconomic policy amid growing uncertainty about the global economic outlook,” they point out.

Ministers also noted the need to fill “data, oversight and regulatory gaps” in the banking system that came to light after the March collapses of SVB (Silicon Valley Bank) and Signature Bank and the bankruptcy of the First Republic in recent weeks.

The United States and its G7 partners have made it a priority in recent months to remove sanctions loopholes and tackle evasion as, more than a year after Russia’s full-scale invasion of Ukraine, appetite for restrictions on new sectors wanes. of the Russian economy.

Against this background, finance ministers also agreed to strengthen information sharing on possible sanctions deviations and monitor the effectiveness of price caps on Russian crude oil and petroleum products. “We remain committed to combating any attempts to evade and undermine our sanction measures,” the statement said.

aid to ukraine

The G7 pledged to provide economic support of US$44 billion to Ukraine, allowing the IMF to approve a four-year loan program worth US$15.6 billion.

“It was a great achievement for us that the G7 was able to strengthen its unity rather than go its separate ways to tackle major international challenges,” Shunichi Suzuki, Japan’s finance minister, said on Saturday.

According to people briefed on the discussions, Brussels is also discussing restrictions on certain EU exports to countries suspected of re-exporting sanctioned products to Russia, to prevent critical components ending up on the Ukrainian battlefield.

Before the ministers’ meeting, US Treasury Secretary Janet Yellen had called for “coordinated action” by G7 nations against Beijing’s use of economic coercion. The G7 agreed to launch a framework for supply chain collaboration on clean energy by the end of the year, but the 14-page document contained no reference to economic security concerns related to China.

Yellen made the comments as Washington finalized a new foreign investment screening mechanism aimed at China.

A senior Japanese finance ministry official acknowledged that the issue of economic coercion was raised during the meeting, but declined to comment on details and whether China was mentioned in those discussions.

Following Yellen’s comments, China’s foreign ministry said on Friday that it was “a victim of US economic coercion,” citing sweeping export controls Washington rolled out in October that would severely complicate attempts to Chinese companies develop cutting-edge technologies with military applications.

“If any country should be criticized for economic coercion, it should be the United States. The US has stretched the concept of national security too far, abusing export controls and taking discriminatory and unfair measures against foreign companies. This seriously violates the principles of economics. market and fair competition,” said China spokesman Wang Wenbin.