G7 agreed global financial system resilient but needs vigilance, Japan Finance Minister says
Business
The officials issued a joint statement vowing to address regulatory gaps in the banking system
NIIGATA, Japan (Reuters) - Finance ministers and central banks from the Group of Seven rich nations agreed the global financial system is resilient but the need for vigilance remains, Japan's finance minister Shunichi Suzuki said on Saturday.
The officials issued a joint statement vowing to address regulatory gaps in the banking system discovered during recent problems at U.S. and Swiss banks, and said they would continue to work closely with supervisory and regulatory authorities to monitor financial sector developments.
"We reaffirm that our financial system is resilient, supported by the financial regulatory reforms implemented after the 2008 global financial crisis, including considerable increases in the levels of bank capital and liquidity, an international framework for effectively resolving failing institutions, and strengthened cross-border regulatory and supervisory cooperation," it said.
British finance minister Jeremy Hunt told reporters at a separate event that G7 finance chiefs in Japan had "very frank and open discussions" about the challenges they face, including banking regulation.
He said Britain believed the regulatory structures worked as intended and prevented much worse problems, but there were clearly lessons to be learned, including how digital transfers had accelerated the rapid pace of deposit withdrawals.
He hailed Britain's rapid work to facilitate a private sale of the UK arm of Silicon Valley Bank to HSBC, a move that protected deposits without taxpayer support, as a regulatory achievement.
But he said Britain was reviewing the legal and regulatory structures to ensure that people had access to their deposits as quickly as possible during any future incidents.
Hunt said Britain was also thinking critically about how many high-growth companies had been concentrated in one branch of one American bank, and recognized that the financing options for such sectors should be more diverse.
"We're looking at a wide range of things, including pension fund reform to see if we can unlock more choices for those companies," he said.
Suzuki also told a press conference the topic of the U.S. debt ceiling came up during the working dinner on the global economy although he declined to say what other ministers discussed about the issue.
The ministers have wrapped up a three-day meeting in the Japanese city of Niigata.
