Excerpts of the Presidency Press Conference Following the G7 Finance Ministers and Central Bank Governors’ Meeting

(Excerpt)

(Saturday, May 13, 2023, 1:01 pm to 1:38 pm)

On May 13, SUZUKI Shunichi, Minister of Finance and Minister of State for Financial Services; UEDA Kazuo, Governor of the Bank of Japan; and KANDA Masato, Vice Minister of Finance for International Affairs gave a presidency press conference following the G7 Finance Ministers and Central Bank Governors’ Meeting, with Japanese-English simultaneous interpretation provided. The following are excerpts from the conference:

[Opening remarks:]

Minister)

With regard to the financial sector, we shared the view that the financial system remains resilient and agreed that we continue to monitor developments with caution and are prepared to take appropriate action to maintain financial stability and the resilience of the global financial system. In light of the changing environment, such as the rapid spread of information via SNS, the FSB and other organizations will identify and scrutinize lessons learned from the recent bank failures and consider priority initiatives to strengthen the financial system. We have also confirmed that we will continue to work to strengthen the resilience of the non-bank sector.
With regard to crypto assets, we confirmed the importance of addressing the risks posed to financial stability and agreed to strengthen measures against money laundering and other financial crimes. In connection with this, serious concerns about North Korea's illicit activities were also shared.

[Questions and answers:]

Q.

The Statement says that G7 countries address the gap between regulation and supervision by strengthening the financial system. The Washington Statement in April also described the financial system as resilient, but with the collapse of First Republic Bank in May and credit uncertainty still lingering, I would like to hear your thoughts on coping with this uncertainty and gap, please.

Minister)

As for the financial system, as I mentioned a little earlier in my opening remarks, we shared the recognition at this meeting that the financial system remains resilient. Based on this view, we have just agreed that we continue to monitor developments with caution and that we are prepared to take appropriate action to maintain financial stability and the resilience of the global financial system. Talking about the future with the development of SNS and internet banking, as revealed by the bank failure in the United States, credit uncertainty spreads instantly by social media, and the withdrawal of deposits, the outflow of funds, occurs at any time 24 hours a day by internet banking. In the past, this sort of thing would happen only during the bank's business hours, because people had to queue in front of the bank and wait for opening. So the environment has changed so much. Based on these circumstances, each of the member countries has recognized this as a common challenge for the future. More specifically, we would like to identify and scrutinize the lessons learned from the recent bank failures and other events at the FSB, etc. to consider priority issues to be addressed for strengthening the financial system.