By Christian Kraemer
WASHINGTON (Reuters) – G7 finance leaders pledged on Wednesday to take action to maintain the stability of the global financial system after recent banking turmoil and to give low- and middle-income countries a bigger role in diversifying supply chains to make them more resilient.
The communique did not mention China by name, but the supply chain language fit in with “friend-shoring” efforts by industrial democracies to work with each other to become less reliant on the Asian manufacturing powerhouse.
“We commit to jointly empowering low- and middle-income countries to play bigger roles in supply chains through mutually beneficial cooperation by combining finance, knowledge, and partnership, which will help contribute to sustainable development and enhance supply chain resilience globally,” the G7 finance ministers and central bank governors said in the statement.
The finance chiefs, meeting on the sidelines of International Monetary Fund and World Bank meetings in Washington, said they had discussed recent financial sector developments after the failure of two U.S. banks and the forced sale of troubled global lender Credit Suisse. They said these “highlight the uncertainty about the global economic outlook and the need to stay vigilant.”
They reiterated that the financial system is resilient, supported by prompt government responses to the turmoil and reforms implemented after the 2008 financial crisis.
“We will continue to closely monitor financial sector developments and stand ready to take appropriate actions to maintain the stability and resilience of the global financial system,” the G7 finance leaders said.
The ministers said that supply chains needed to achieve both efficiency and resilience, helping to maintain macroeconomic stability and make economies more sustainable globally. The statement cited the need to diversify the “highly concentrated” supply chains for clean energy technologies.
“In this endeavor, we will stand firm to protect our shared values, while preserving economic efficiency by upholding the free, fair and rules-based multilateral system and international cooperation,” the G7 finance leaders said, using language often used to exclude China and other autocratic regimes.
(Reporting by Christian Kraemer; Additional reporting by David Lawder and Andrea Shalal; Editing by Leslie Adler and Andrea Ricci)
