BEIJING, April 8 (Reuters) – The U.S. and China are deepening co-operation on financial stability issues, Treasury Secretary Janet Yellen said on Monday, with more simulations of financial shocks due after a recent exercise on tackling the failure of a large bank.
Wrapping up four days of meetings in China, Yellen issued a stern warning to Chinese banks that facilitating transactions providing material support or dual-use goods to Russia for its Ukraine war effort would lead to “significant consequences.”
Yellen said the financial stability exercises were developed by a U.S.-China financial working group formed last year when she first visited to try to rebuild economic ties.
The group, led by representatives of the U.S. Treasury and the People’s Bank of China, last met in Beijing in January.
“Just like military leaders need a hotline in a crisis, American and Chinese financial regulators must be able to communicate to prevent financial stresses from turning into crises with tremendous ramifications for our citizens and the international community,” Yellen told a news conference.
She discussed financial stability issues on Monday with PBOC Governor Pan Gongsheng at the central bank’s headquarters in Beijing.
Speaking on condition of anonymity, a senior U.S. Treasury official said the new exercises would take place in April or May.
One would cover operational resilience co-ordination risks prompted by a major external shock, such as a natural disaster, a cyberattack on a bank, or a new pandemic, while the other would cover insurance system impacts from climate change risks.
Source: REUTER
