TOKYO- Finance leaders of the Group of Seven (G7) advanced economies will discuss this week ways to strengthen the global financial system, Japanese Finance Minister Shunichi Suzuki said on Tuesday, as recent US bank failures shed light on the heightening risk of digital bank runs.
“The environment surrounding finance has changed dramatically with the emergence of social media and Internet banking,” said Suzuki, who will chair the G7 finance leaders’ gathering to be held in the Japanese city of Niigata on May 11-13.
“Responding to such changes have become a common challenge for countries across the world, including Japan,” he said, adding that the topic will be among many issues to be discussed at this week’s G7 meeting.
The recent collapse of First Republic Bank has exacerbated investor worries about the US banking sector, and raised calls for better global oversight by regulators to new risks such as digital bank runs.
“Concerns over banks’ credit-worthiness have yet to subside since the US regional bank failure in May,” Suzuki said.
“We’re watching the situation with a strong sense of alarm, as markets and economies are globally intertwined,” he said, adding that Japan’s banking system was stable as a whole. – Reuters
