As recent U.S. bank failures focus attention on the possibility of digital bank runs, finance ministers of the Group of Seven (G7) leading nations will debate methods to improve the global financial system this week, Japan’s finance minister said on Tuesday.
“The environment surrounding finance has changed dramatically with the emergence of social media and Internet banking,” said Finance Minister Shunichi Suzuki, who will preside over the G7 finance leaders’ meeting to be held May 11–13 in the Japanese city of Niigata.
He said that the problem will be among many topics to be discussed during this week’s G7 conference. “Responding to such changes has become a common challenge for countries across the world, including Japan,” he said.
According to Japan’s senior financial diplomat Masato Kanda, the G7 finance chiefs may also debate the U.S. debt ceiling issues and ways to stop Russia from evading sanctions.
According to Kanda, Japan will invite Ukraine’s finance minister to attend a meeting on Thursday to discuss aid for the war-torn nation.
Investor concerns about the U.S. banking industry have increased as a result of First Republic Bank’s recent failure, and requests for improved worldwide regulatory control of new dangers like digital bank runs have increased.
Two government sources with direct knowledge of the situation indicated that Japan would try to release a G7 joint statement following the meeting of the finance leaders, which may emphasize the need for authorities to keep an eye on problems in the banking sector.
One of the people, who spoke on the condition of anonymity because he was not authorized to talk in public, said, “There won’t be much change to the basic message agreed upon in April.”
The G7 finance chiefs stated in a joint statement they were prepared to take “appropriate actions” to protect the stability and resilience of the global financial system. The statement was released in April following their meeting in Washington, D.C.
According to a senior Treasury source on Friday, U.S. Treasury Secretary Janet Yellen would convey to her G7 counterparts that the American banking system is still sound while she is in Japan.
