G7 to deliberate on banking system

The finance ministers of the Group of Seven (G7) advanced economies will gather in the Japanese city of Niigata this week to discuss ways to strengthen the global financial system, said Japan’s finance minister, Shunichi Suzuki. The recent failures of US banks have brought attention to the risks of digital bank runs, and the ministers will explore solutions to this problem. Responding to the changing financial environment brought on by the emergence of social media and internet banking is a common challenge faced by countries across the world.

The G7 finance ministers will also discuss US debt ceiling issues and measures to prevent Russia from circumventing sanctions, according to Japan’s top financial diplomat, Masato Kanda. On Thursday, Japan will invite Ukraine’s finance minister to participate in a session to discuss aid to the war-torn country. The recent collapse of First Republic Bank has heightened concerns among investors about the US banking sector, raising calls for better global oversight by regulators.

Following the finance leaders’ meeting, Japan plans to release a joint statement emphasising the need for authorities to stay alert to potential banking sector problems, two sources in the government with knowledge of the matter said. The statement may not differ much from the one issued in April, in which the G7 finance chiefs expressed readiness to take appropriate measures to maintain the stability and resilience of the global financial system. US Treasury Secretary Janet Yellen, who will attend the gathering in Japan, will reassure her counterparts that the US banking system remains secure, according to a senior Treasury official.

The G7 finance ministers will be exploring ways to strengthen the global financial system in the face of emerging challenges brought about by social media and internet banking. As well as discussing US banking sector risks, they will be examining measures to prevent Russia from circumventing sanctions and aid for Ukraine. While Japan aims to release a joint statement after the meeting, it is not expected to differ much from the statement released in April. US Treasury Secretary Janet Yellen will be attending the gathering and will reassure her counterparts that the US banking system remains sound.