Group of Seven (G7) finance heads have promised to take action to strike stability of the global financial system following the recent banking collapse. They have stated that they will give low and middle-income countries a more significant focus on diversifying supply chains to make them more resilient.

Better measures to be taken to calm the finance sector

The finance heads who met on the sidelines of the International Monetary Fund and the World Bank meetings in Washington said they had been discussing recent financial turmoil concerning the collapse of Silicon Valley Bank and Credit Suisse. 

“We commit to jointly empowering low- and middle-income countries to play bigger roles in supply chains through mutually beneficial cooperation by combining finance, knowledge, and partnership, which will help contribute to sustainable development and enhance supply chain resilience globally.”

G7 Finance Ministers and Central Bank Governors

Shunichi Suzuki, Japan’s Finance minister, said they would continue monitoring the finance sector as they have seen their efforts are paying off.

“We will continue to closely monitor financial sector developments and stand ready to take appropriate actions to maintain the stability and resilience of the global financial system.”

Shunichi Suzuki, Japan’s Finance Minister

The officials noted that the supply chains needed now should be more efficient and resilient. They added that they need to diversify the current “highly concentrated” ones but particularly said that their actions are not in any way aimed at affecting China.

This meeting and deliberations come after Brazil, Russia, India, China, and South Africa (BRICS) have gained strength by pulling their efforts together and attracting other nations like UAE and Mexico. There have been reports that these world powers may seek to topple the US Dollar.

The international monetary fund has released economic forecasts warning that the fragmentation of the global economy owing to geopolitics will reduce longer-term growth potential and said only 3% growth is expected in 2028. Their prediction is the lowest five-year projection since it started the service in 1990.