Finance chiefs of the Group of Seven industrialized economies commenced a meeting Wednesday to coordinate efforts to address banking woes, stubborn inflation and Russia's war in Ukraine.
Also on the agenda for the G-7 finance ministers and central bank governors is 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.
Western nations have imposed sanctions on Moscow, including an oil price cap, while at the same time providing support to war-torn Ukraine, with the G-7 leaders in a statement in February condemning Russia for its "illegal, unjustifiable, and unprovoked war."
Government officials and central bank governors are in Washington for a series of meetings arranged by the International Monetary Fund and the World Bank. The G-7 meeting is the first for Bank of Japan Governor Kazuo Ueda, who assumed his post on Sunday.
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.
"As G-7 chair (this year), we will lead the debate and exchange views on issues, including recent financial market developments and inflation," Japanese Finance Minister Shunichi Suzuki said before departing for Washington, adding that he will seek to strengthen international coordination in building stronger supply chains.
Japan is seeking to lay the groundwork for another finance chiefs' meeting in May, a prelude to the G-7 leaders' summit in the western prefecture of Hiroshima in the same month.
U.S. Treasury Secretary Janet Yellen said during a press conference Tuesday that she remains vigilant of downside risks, with Russia's war in Ukraine dragging on and many countries still recovering from the COVID-19 pandemic. Despite recent pressures, the U.S. banking system is "sound," with strong capital and liquidity positions, she added.
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.
