On May 23-25, 2024, the G7 Finance Ministers and Central Bank Governors met in Stresa, Italy, the US Department of the Treasury reports.
They were joined by Ukrainian Minister of Finance Sergii Marchenko, heads of the International Monetary Fund (IMF), heads of the World Bank Group (WBG), heads of the Organisation for Economic Cooperation and Development (OECD), and heads of Financial Stability Board (FSB).
The group also held an outreach session with Brazil, representatives of the African Union, Korea, and Saudi Arabia, particularly to discuss the global implications of artificial intelligence (AI), development, cross-border payments, and future cooperation.
Here are 7 of the most important highlights from the meeting:
1. Global Economic Resilience Amid Multiple Shocks
The representatives noted that the global economy has proven overwhelmingly resilient despite the COVID-19 pandemic and geopolitical tensions. Global markets have shown robustness, and fiscal and monetary policies have alleviated some of the most dire macroeconomic impacts of the pandemic and the Russian-Ukrainian war.
2. Condemnation of Russia’s Aggression and Support for Ukraine Reaffirmed
The US Treasury stated that the G7, “salute once more the bravery and resilience of the Ukrainian people and reaffirm our unwavering support for Ukraine for as long as it takes,” welcoming the approval of billion-dollar plans by the US, UK, Canada, Japan, and the EU to support Ukraine in its defense and future reconstruction and recovery. They also highlighted the impact of sanctions taken against Russia and promised to tighten compliance with and enforcement of the Oil Price Cap and remain ready to impose further sanctions where and when necessary and appropriate.
3. Focus on Financial Stability and Regulatory Issues to Ensure Systemic Resilience
The G7 emphasized the importance of maintaining financial stability and addressing regulatory issues amid global risks. They highlighted the role of the FSB and Standard-Setting Bodies (SSBs) in identifying vulnerabilities and developing policies. Additionally, the G7 supported the FSB's efforts to enhance the resilience of the non-bank financial intermediation (NBFI) sector, aiming to ease systemic risks. They committed to implementing policy recommendations to address liquidity mismatches and leverage issues within NBFIs. This approach ensures a stable and robust financial system.
4. Enhancing Cyber Resilience
The G7 further highlighted the importance of cyber resilience in the financial sector, especially due to geopolitical tensions leading to high risks. They noted the potential of “hybrid risks” and the heightened sophistication of cyber threats, citing the emergence of technologies such as AI and quantum computing. They asserted that regulation and supervision are key in ensuring financial stability and security in the digital age, as well as promoting the adoption of guidelines, analysis of emerging risks, and “cyber exercises”.
Also read
5. Promotion of Responsible AI Integration in Economic and Financial Systems
The G7 acknowledged the plausibly transformative consequences of the development of AI technology for the economies and society in general as well as its positive opportunities: AI may bring productivity growth, improve the quality of some services, and introduce better efficiency in public functions such as tax collection.
But AI also presents certain risks. The G7 committed to deepening their understanding of AI and ensuring that the countries’ institutions become equipped to deal with it.
6. Support for Universal Health Coverage and Global Health Architecture
The G7 reaffirmed their commitment to strengthening global health governance and financing, supporting the World Bank's plan for Universal Health Coverage by 2030.
They encouraged collaboration with Global Health Initiatives, focusing on pandemic prevention and strengthening health systems.
7. Promoting Green Transition and Development Initiatives
The representatives reaffirmed their commitment to a green transition, ultimately aiming for a net-zero economy. They supported initiatives like the African Vaccine Manufacturing Accelerator and the Alliance for Green Infrastructure in Africa, aiming to foster sustainable development through enhanced pharmaceutical manufacturing capacity and transformative green infrastructure projects.