Finance chiefs of the Group of Seven industrialized economies said Wednesday they will take necessary steps to maintain the stability of the global financial system in the wake of turmoil in the banking sector.
The G-7 finance ministers and central bank governors, who held a meeting in Washington, issued a statement in which they also reaffirmed their "unwavering support for Ukraine and unity in our condemnation of Russia's war of aggression."
About a month ahead of the group's summit in the Japanese city of Hiroshima, they assessed recent economic developments and also said that world growth has proven to be "more resilient than expected," despite stubborn inflation, banking woes and the ongoing war.
Financial markets had been fixated on the pace of monetary tightening in the United States and Europe, but the collapse of U.S. lenders Silicon Valley Bank and Signature Bank, and the rescue by Swiss bank UBS of troubled rival Credit Suisse has sparked concern about the health of the banking system.
Speaking at a press conference after the meeting, Japanese Finance Minister Shunichi Suzuki said the G-7 countries shared the view that the banking system is "resilient." But he added, "Uncertainty is heightening in financial markets."
The ministers and central bankers from major democratic economies such as Britain, Germany and the United States offered a weak note of optimism, but they nevertheless warned that "recent financial sector developments highlight the uncertainty about the global economic outlook and the need to stay vigilant."
The G-7 meeting, joined by Ukrainian Finance Minister Sergii Marchenko, took place on the sidelines of meetings of the International Monetary Fund and the World Bank.
Bank of Japan Governor Kazuo Ueda, who assumed his post on Sunday, attended the G-7 meeting for the first time. Ueda said he explained that the BOJ would continue with monetary easing, adding that Japan's price situation is "quite different" from other advanced nations experiencing high inflation.
"As we guide monetary policy, it is appropriate to pay more attention to the risk of inflation undershooting 2 percent and thus moving away from the goal" than to the risk of it persistently remaining above 2 percent, Ueda told the press conference with Suzuki.
While welcoming the approval by the IMF of a $15.6 billion program for Ukraine, the finance chiefs reiterated their "strong commitment" to imposing sanctions and other punitive economic measures on Russia in response to its "illegal, unjustifiable and unprovoked war."
They also discussed how to strengthen supply chains and ensure economic security at a time when China and Russia, both of which have critical natural resources, are deepening their ties.
The statement said that "enhancing supply chain resilience will help us maintain macroeconomic stability and make economies more sustainable globally" but did not mention any country by name.
It also said the G-7 is fully committed to making further efforts to support low- and middle-income countries, which are disproportionately affected by Russia's invasion of Ukraine and other global challenges.
Japan is seeking to lay the groundwork for another finance chiefs' meeting in May, a prelude to the G-7 summit in the same month.
The G-7 finance chiefs previously met in February on the fringes of a broader Group of 20 meeting in India. At the time, they agreed to expand their economic assistance to Ukraine to $39 billion this year, from $32 billion pledged earlier, to help it repair infrastructure and defend against Russia.
The G-7 consists of Britain, Canada, Germany, France, Italy, Japan and the United States, plus the European Union.
