Aurelia Butler

G7 finance ministers have warned of “heightened uncertainty” surrounding the global economy and the need to address regulatory gaps in the banking system in the wake of financial sector turmoil.“The global economy has shown resilience against multiple shocks,” finance ministers of the world’s most advanced economies said in their final communique after a three-day ministerial meeting in Japan on Saturday. “Nevertheless, we need to remain vigilant and stay agile and flexible in our macroeconomic policy amid heightened uncertainty about the global economic outlook.” The finance ministers also noted the need to fill “data, supervisory and regulatory gaps” in the banking system that have come to light following the March collapses of Silicon Valley Bank and Signature Bank and the failure of First Republic in recent weeks. The US and its G7 partners have made removing sanctions loopholes and combating evasion their priority in recent months as, more than a year after Russia’s full-scale invasion of Ukraine, the appetite for imposing restrictions on new parts of Russia’s economy wanes. Against that backdrop, the finance ministers also agreed to strengthen sharing of intelligence on possible sanctions dodging, and monitor the effectiveness of the price caps on Russian crude oil and petroleum products. “We remain committed to countering any attempts to evade and undermine our sanction measures,” the communique said. The G7 committed to provide economic support of $44bn to Ukraine, enabling the IMF’s approval of a four-year lending programme worth $15.6bn.“It was a big achievement for us that the G7 was able to strengthen its unity rather than going in separate ways to address major international challenges,” Shunichi Suzuki, Japan’s finance minister, said on Saturday. According to people briefed on the discussions, Brussels is also discussing restrictions on certain EU exports to countries that it suspects are re-exporting sanctioned products to Russia to prevent critical components from ending up on the Ukrainian battlefield.Ahead of the finance ministers’ meeting, US Treasury secretary Janet Yellen had called for “co-ordinated action” by G7 nations against Beijing’s use of economic coercion. The G7 agreed to launch a framework for supply chain collaboration in clean energy by the year-end but the 14-page document contained no reference to economic security concerns related to China.Yellen made the comments as Washington finalised a new outbound investment-screening mechanism aimed at China.

A senior Japanese finance ministry official acknowledged that the issue of economic coercion was raised during the meeting, but declined to comment on details and on whether China had been mentioned in those discussions. Following Yellen’s remarks, China’s foreign ministry said on Friday that it was “the victim of US economic coercion”, citing sweeping export controls the US rolled out in October that would severely complicate efforts by Chinese companies to develop cutting-edge technologies with military applications.“If any country should be criticised for economic coercion, it should be the United States. The US has been overstretching the concept of national security, abusing export control and taking discriminatory and unfair measures against foreign companies. This seriously violates the principles of market economy and fair competition,” spokesperson Wang Wenbin said. More

NIIGATA, Japan (Reuters) – Many central bank governors from the Group of Seven (G7) rich nations appeared to feel the impact of past interest rate hikes has yet to show fully as they look to guide future monetary policy, Bank of Japan Governor Kazuo Ueda said on Saturday.”Participants seemed to share the understanding that the effect of past interest rate hikes has yet to fully show on their economies and inflation, and could begin to appear more ahead,” Ueda told a news conference after the gathering.”Many said they wanted to guide monetary policy, taking that point in mind,” he added.Turning to Japan, Ueda said he told his G7 counterparts the economy was recovering, although consumer inflation, which now stands above 3%, will begin to slow toward the middle of the current fiscal year, which ends in March 2024.”I told the G7 meeting that Japan is maintaining ultra-loose monetary policy to sustainably and stably achieve the BOJ’s 2% inflation target,” he said.Ueda and Finance Minister Shunichi Suzuki spoke at the news conference as Japan is the chair of this year’s G7 finance leaders’ gathering in Niigata, which concluded on Saturday. More

NIIGATA, Japan (Reuters) – The current banking environment and pressures on earnings of some U.S. regional banks may lead to some concentration in the sector, and regulators will likely be open to such mergers, Treasury Secretary Janet Yellen said on Saturday.Yellen told Reuters she was not seeing evidence of pressure on smaller community banks, which had a large percentage of insured deposits. She expressed confidence that nearly all banks had access to sufficient liquidity to guard against unexpected deposit outflows from uninsured depositors.However, she said a certain degree of consolidation in the regional and midsize banking sector could occur. She declined to discuss any specific banks.”This might be an environment in which we’re going to see more mergers, and you know, that’s something I think the regulators will be open to, if it occurs,” she said in an interview on the sidelines of meetings of finance officials from the Group of Seven rich nations n Japan. Yellen sought to reassure her G7 partners this week that the U.S. financial system was stable, saying the United States had taken action to strengthen confidence in its banking system after the failure of three regional banks since mid-March.On Friday she told Bloomberg TV that all three of those banks had tended to have substantial losses and a very high proportion of uninsured deposits but that the overall banking system was well-capitalized and still had “very solid earnings.”Shares of major U.S. regional lenders have been more volatile in recent weeks, with investors still wary about the stability of mid-sized banks.The KBW Regional Banking index, which has fallen nearly 14% so far this month, rose 0.39% on Friday, but PacWest Bancorp, which lost 23% on Thursday after reporting a decline in deposits, dropped a further 3%.Yellen noted that pressure on a bank’s stock could unsettle uninsured depositors. “The unfortunate dynamic is that once a bank’s stock is under pressure, it can trigger concern among uninsured depositors … even though the bank has adequate capital and liquidity,” she said. More

The company, one of China’s best-selling domestic smartphone brands, said it will cease operations of its Zeku unit, which it set up in 2019. Its products include the MariSilicon X chip, which is a neural processing unit (NPU) that improves images for video and photography taken on smartphones.”Due to the uncertainties in the global economy and the smartphone industry, we have to make difficult adjustments for long-term development,” a company representative said. China’s smartphone market, the world’s biggest, is struggling to recover from one of its worst ever slumps as cost-conscious consumers continue to shy away from big-ticket purchases even after the country’s lifting of zero-COVID curbs. In 2022, smartphone shipments fell 14%, and total unit shipments fell below 300 million for the first time in a decade. In the first quarter, total smartphone shipments dropped 11% year-on-year to 67.2 million units, the lowest quarterly total since 2013, research firm Canalys said last month. Oppo and its Chinese rivals such as Xiaomi (OTC:XIACF) set up in-house chip design units in pursuit of self-reliance after the U.S. crippled Huawei Technologies’ smartphone division with sanctions that prevented it from sourcing key components. Oppo is owned by BBK Electronics, which also owns Vivo, another top-selling Chinese smartphone brand. More

“I care very much about how the labor market performs because for most people in the U.S. economy, their standing in the labor market will very much determine their station in life, so that’s something I’m very mindful of,” Jefferson said in answer to a question at conference at the Hoover Institution.”But I also am aware that inflation is the most insidious of social diseases, and so it’s important to try to get it down,” he said. More

The automotive tech billionaire has agreed to acquire 82% of Forbes, which includes the remaining portion of the company owned by the Forbes family, the joint statement to Reuters said. Russell will not be involved in the day-to-day operations of the company, the statement said, adding that capital for the acquisition is independent of his stake in Luminar. It is not immediately clear how Russell is financing the deal. As part of the deal, which was first reported by Wall street Journal, Forbes’ Hong Kong-based parent IWM will retain a minority stake in the company and also keep one board seat. Forbes will also add a new board to the company consisting of American media, tech, and AI experts, the statement added. “It is only fitting that now through this transaction, a true innovator and visionary Austin Russell will be the new steward for the brand”, Forbes CEO Mike Federle said in a statement to Reuters.Steve Forbes, Chairman and Editor-in-Chief of Forbes Media, will remain involved in the company, the statement said. Forbes, one of the oldest media outlets in the United States, publishes its eponymous flagship magazine which reaches 5 million readers. More

In the draft communique, the G7 central banks said they remained “strongly committed” to achieving price stability and ensuring inflation expectations stayed well-anchored.”The global economy has shown resilience against multiple shocks including the COVID-19 pandemic, Russia’s war of aggression against Ukraine, and associated inflationary pressures,” the draft communique said.”Nevertheless, we need to remain vigilant and stay agile and flexible in our macroeconomic policy amid heightened uncertainty about the global economic outlook,” it said.The finance ministers and central bank governors of the G7 rich democracies will issue the communique after their three-day meeting in the Japanese city of Niigata concludes later on Saturday.The draft communique made no mention of the U.S. debt ceiling stalemate, which overshadowed the G7 gathering as policymakers fretted over the risk of a potential U.S. default.China has also been much on the minds of the G7 finance leaders, with this year’s chair Japan spearheading efforts to diversify supply chains and reduce their heavy reliance on Beijing.Under the new partnership scheme, the G7 economies would offer aid to low- and middle-income countries so they can play a bigger role in supply chains for energy-related products, such as by refining minerals and processing manufacturing parts.”Diversification of supply chains can contribute to safeguarding energy security and help us to maintain macroeconomic stability,” the draft communique said.The G7 would work with interested countries and relevant international organizations with the aim of the scheme’s launch “by the end of this year at the latest,” it said.The draft communique made no mention of an idea, flagged by the United States, to consider imposing targeted restrictions on investments to China to combat Beijing’s use of “economic coercion” against other countries.But it said G7 countries will work to ensure foreign investment in critical infrastructure “does not undermine the economic sovereignty of host countries.”The discussions among the finance leaders will lay the groundwork for next week’s G7 summit in Hiroshima.The G7 finance chiefs met at a time when worries over the U.S. debt ceiling standoff are adding to uncertainty over the global outlook, already clouded by signs of weakness in China’s economy, stubbornly high inflation, and the recent failure of several U.S. banks.On banking-system woes, the draft communique said the financial system was resilient due to regulatory reforms implemented after the 2008 global financial crisis.”We will address data, supervisory, and regulatory gaps in the banking system,” the draft communique said.The G7 reiterated their condemnation of Russia’s “illegal, unjustifiable, and unprovoked war of aggression” against Ukraine, and said it will continue to strengthen coordination in monitoring cross-border transactions between Russia and other countries, the draft communique showed. More