G7 finance ministers tackle global economic challenges as Yellen seeks to reassure on debt standoff

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The financial leaders of the Group of Seven wealthy nations meet in Japan beginning Thursday as a standoff over the U.S. debt ceiling and potential default looms as one of the biggest potential threats to the global economy, along with the war in Ukraine.

U.S. Treasury Secretary Janet Yellen said one of her priorities in Niigata, a port city on the Japan Sea coast, is to emphasize the importance of resolving the standoff over the national debt in the world's largest economy.

The finance ministers and central bank governors are meeting for three days ahead of a G7 summit later this month in Hiroshima. Their talks late Thursday were due to center on efforts to support Ukraine and pressure Russia to end the war. Barring that, Biden said it was "possible but not likely" that he would need to postpone a trip to Japan, Australia and Papua New Guinea later this month.

"We are taking a broad range of individual and joint actions to bring down inflation, sustain growth, and help mitigate the impact of external shocks, including to developing countries," she said. The Fed surveyed 65 U.S. banks and U.S. branches of 19 foreign banks in late March and early April, well after Silicon Valley Bank and Signature Bank collapsed in early March, touching off the latest round of bank turmoil. First Republic Bank failed earlier this month in the second-largest bank failure in U.S. history.

 

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