G7 Finance Ministers and Central Bank Governors Meeting Communiqué

18 -20 May 2022, Petersberg, Germany

Preamble

We, the G7 Finance Ministers and Central Bank Governors, met on the Petersberg on 18-20 May 2022, joined by the Heads of the International Monetary Fund (IMF), World Bank Group, Organisation for Economic Cooperation and Development (OECD), and Financial Stability Board (FSB). We agreed on concrete actions to deepen multilateral economic cooperation and underlined our commitment to our united response to Russia´s war of aggression against Ukraine and to our unwavering support for Ukraine. We were honoured to be joined virtually for our meeting by the Ukrainian Prime Minister and the Ukrainian Finance Minister.

Support to Ukraine

  1. We remain steadfast in our support for and solidarity with Ukraine. In our statement of 20 April 2022, we confirmed that together with the international community we have provided and pledged considerable support to Ukraine this year, on top of the economic support provided since 2014 until 2021, which exceeds 60 billion US dollars. While also addressing Ukraine´s humanitarian and other material needs, we recognise, in particular, Ukraine´s urgent short- term financing needs. In 2022, we have mobilised 19.8 billion US dollars of budget support, including 9.5 billion US dollars of recent commitments in the lead up to the Petersberg meeting, to help Ukraine close its financing gap and continue ensuring the delivery of basic services to the Ukrainian people. Furthermore, we welcome ongoing work across the G7 and international financial institutions on further substantial financing to Ukraine, notably including the proposal by the European Commission for up to 9 billion euros of additional macro-financial assistance. Additional planned support to Ukrainian state-owned enterprises and the private sector through the European Bank for Reconstruction and Development and the International Finance Corporation amounts to 3.4 billion US dollars. Importantly, the aforementioned budget support of 19.8 billion US dollars is in addition to recent announcements on further military and humanitarian support. Across all support, we are urgently working on accelerating disbursements of our commitments to Ukraine. We will continue to stand by Ukraine throughout this war and beyond and are prepared to do more as needed. We are working closely with Ukraine to safeguard its macroeconomic stability in face of the challenges posed by Russia´s war of aggression, massive destruction of critical infrastructure and disruption of traditional shipping routes for Ukrainian exports.
  2. We join our Leaders and Foreign Ministers in their statements of 8 May 2022 and 14 May 2022 calling for peace and committing to support Ukraine in rebuilding for its future. We call on all partners to join us in supporting Ukraine´s long-term recovery and to ensure the massive joint effort for reconstruction is closely coordinated, including with the Ukrainian authorities and international financial institutions. Recalling our statement of 20 April 2022, we welcome the important work by international organisations in this regard and support Ukraine´s reform efforts and ambition.
  3. We underscore our shared commitment to our determined and coordinated sanctions response to Russia´s war of aggression. We continue to increase Russia´s costs of its war by isolating Russia and Belarus from the global economy. We remain committed to fully implementing and enforcing our economic and financial sanctions and remain vigilant against sanctions evasion, circumvention and backfilling. We welcome the ongoing work of the multilateral Russian Elites, Proxies and Oligarchs Task Force. President Putin, his government and supporters, and the enabling Belarusian regime, bear full responsibility for the social and economic consequences of the war.
  4. Russia´s war of aggression is causing global economic disruptions, impacting the security of global energy supply, food production and exports of food and agricultural commodities, as well as the functioning of global supply chains in general. The economic costs of the war are felt disproportionately by vulnerable groups across all economies and particularly by those countries already facing food insecurities and elevated debt levels as consequences of the pandemic. We are committed to mitigating these harmful impacts of the war and fully support the multilateral action initiated by the United Nations Secretary General, the “Global Crisis Response Group on Food, Energy and Finance.” We fully support the stepped-up response by the international financial institutions and welcome their Action Plan to Address Food Insecurity, as an adequate platform to channel actions by international financial institutions and other stakeholders. We also welcome the Global Alliance for Food Security as launched yesterday, 19 May 2022, by the G7 Development Track and supported by the World Bank to foster and facilitate the work of the aforementioned Global Crisis Response Group and welcome concrete actions as planned by various international initiatives. We call on the international financial institutions to actively engage in these multilateral and synergetic platforms in line with their mandates and expertise and help operationalise their goals, providing support to vulnerable countries and appropriate finance to keep trade flowing, as well as supporting domestic agricultural production. We are committed to keeping markets open and enhancing the resilience of agricultural and energy markets in line with climate and environmental goals.

Macroeconomic Stability

  1. Against the challenging backdrop of the pandemic and the massive economic repercussions of Russia´s war of aggression against Ukraine, we remain committed to driving a strong, sustainable, balanced and inclusive global recovery. We will continue to work together to minimise the impact of the war globally as well as on our own economies and population by providing well-targeted support, where necessary.
  2. Across most G7 countries, inflation rates have reached levels not seen for decades, as a result of Russia’s war of aggression against Ukraine, which is causing substantial increases in commodity, energy and food prices. G7 central banks are closely monitoring the impact of price pressures on inflation expectations and will continue to appropriately calibrate the pace of monetary policy tightening in a data-dependent and clearly communicated manner, ensuring that inflation expectations remain well anchored, while being mindful to safeguard the recovery and limit negative cross-country spillovers. We will also continue to closely monitor markets given recent volatility. We reaffirm our exchange rate commitments as elaborated in May 2017. Unprecedented policy support has enabled the global economy and the G7 to weather the current crisis and a pandemic crisis of historic proportions, paving the way for the recovery. However, the necessary fiscal response also led to higher levels of public debt. We are committed to a stability- and growth-oriented medium-term macroeconomic policy mix, which puts us on a clear path to medium-term sustainability of public finances and a resilient financial sector.
  3. Our response to Russia´s war of aggression against Ukraine is also a reminder of the need to redouble our efforts with international partners to enhance multilateral cooperation and to deliver concrete outcomes. We commit to maintaining and strengthening a safe, resilient and open global economic system. We are united in our strategic response to the structural economic changes made evident by the pandemic and Russia´s war of aggression against Ukraine. We recognise that global security and economic and financial stability complement and reinforce each other. We are committed to enhancing our defence, energy security and economic resilience whilst monitoring potential vulnerabilities. We will continue to support the greater resilience of critical supply chains, including through diversification, and the investment in alternative resources and new technologies, including critical minerals and renewable energies.
  4. The G7 remains committed to jointly addressing challenges to long-term growth, including facilitating the digital and net-zero transitions and the massive investments required. We commit to mobilise high levels of private and public investments to unleash the potential for innovation and productivity gains. We emphasise our commitment to making the transformation of our economies inclusive, by promoting broad-based growth that addresses existing inequalities within and across countries. We recognise the importance of diversity and the crucial role of women and under-represented groups for the long-term success of our economies. This includes the need to remove structural barriers to gender equality, including through inclusive and supportive economic and fiscal policy frameworks. We welcome the work of the G7 Gender Equality Advisory Council. We support the ongoing work on gender mainstreaming in international financial institutions and welcome the International Monetary Fund´s work on its gender strategy.

Global Health

  1. Effectively fighting the pandemic on a global scale remains critical for the economic recovery. Close international cooperation, sufficient financial resources and multilateral solutions remain essential to end this pandemic. All G7 members commit to continue leading the international fight against the pandemic recognising that adequately funding the Access to COVID-19 Tools Accelerator in the current budget cycle is central to end the acute pandemic. The G7 have already provided and pledged 18.33 billion US dollars for the Accelerator of which 12.36 billion US dollars fall to its vaccine pillar. We welcome all efforts for successful fundraising this year, but emphasise that more efforts by all members of the international community, including the G20, are required. We underline the need for a comprehensive pandemic response, supporting countries with fragile health systems and addressing country-specific challenges on the ground to get vaccines into arms as set out in the G7 Foreign Ministers’ Action Plan; diagnostics, therapeutics and protective equipment in place and to strengthen health systems for the long- run.
  2. We emphasise the importance of strengthening governance and financing of the global health architecture with an adequately and sustainably funded World Health Organisation at its centre, as well as strengthening international coordination and cooperation, especially for pandemic prevention, preparedness and response, and Universal Health Coverage taking forward lessons learnt from COVID-19. The G7 will continue to contribute to global efforts and support the ongoing work of the G20 Joint Finance-Health Taskforce to strengthen coordination between finance and health officials. We agree that pandemic prevention, preparedness and response efforts require additional support to close existing capacity and financing gaps. We welcome the outcomes of the Second Global COVID-19 Summit on 12 May 2022, including the support for the establishment of a Financial Intermediary Fund, housed at the World Bank, to catalyse investments in pandemic prevention, preparedness and response.
  3. We reaffirm our commitments of December 2021 on actions to support antibiotic development and support the ongoing work of the G7 Health, Agriculture and Climate Environment and Energy Tracks on antimicrobial resistance (AMR). We welcome the AMR progress report by the World Health Organisation and the Global AMR R&D Hub and request a further detailed update on the progress made for G7 Finance and Health Ministers in 2023.
  4. G7 Finance Ministers welcomed having a discussion on global health issues in a joint session with G7 Health Ministers.

Digitalisation

  1. We reiterate our strong political commitment to the timely and effective implementation of the Organisation for Economic Co-operation and Development (OECD) / G20 Inclusive Framework Two-Pillar Solution to address the tax challenges arising from globalisation and the digitalisation of the economy with a view to bringing the new rules into effect at global level. We will provide support to developing countries for the implementation of this historic agreement. We welcome the report by the OECD Secretariat on tax co-operation for the 21st century and ask the OECD to continue its work in this area and to report back on further developments.
  2. Digital innovation in payments is a key driver of economic progress and development, notably through faster, cheaper, more transparent and more inclusive cross-border payment services. We emphasise the important work being conducted through the G20 Roadmap for enhancing cross-border payments. In this context, we highlight the opportunities and implications of Central Bank Digital Currencies (CBDCs) and their potential role in future payment transactions. We recall the Public Policy Principles for Retail CBDCs agreed in October 2021 and reiterate that any CBDC should be grounded in transparency, the rule of law, sound economic governance, cyber security and data protection. We encourage jurisdictions exploring CBDCs to examine the international dimensions of CBDCs, in particular their cross-border use. CBDCs with cross-border functionality may have the potential to spur innovation and open up new ways to meet users’ demand for more efficient international payments, but continued international cooperation will be important to understanding and minimising any negative spillovers to the international monetary and financial system.
  3. The G7 supports work by the Financial Stability Board (FSB) to monitor and address financial stability risks arising from all forms of crypto-assets, and welcomes increasing global cooperation to address regulatory issues associated with the use of crypto-assets, including in cross-border payments. In light of the recent turmoil in the crypto-asset market, the G7 urges the FSB, in close coordination with international standard-setters, to advance the swift development and implementation of consistent and comprehensive regulation of crypto-asset issuers and service providers, with a view to holding crypto-assets, including stablecoins, to the same standards as the rest of the financial system. In particular, the G7 calls for rapid implementation of the Financial Action Task Force (FATF) ‘travel rule’ and stronger disclosure and regulatory reporting, for instance, as regards reserve assets backing stablecoins. We reaffirm that no global stablecoin project should begin operation until it adequately addresses relevant legal, regulatory and oversight requirements through appropriate design and by adhering to applicable standards. The G7 remains committed to high regulatory standards for global stablecoins, following the principle of same activity, same risk, same regulation.

Climate and Environment

  1. The G7 reaffirms its steadfast commitment to the goals of the Paris Agreement and to implement domestic measures aimed at achieving our emission reduction targets by 2030 and net zero by 2050 or earlier. We commit to intensifying efforts to accelerate the transition in a way that positively impacts jobs, growth, fairness and the environment, both globally and at domestic level. Russia´s war of aggression against Ukraine is putting further upward pressure on energy prices and underscores the need to accelerate the reduction of our overall reliance on fossil fuels and strengthen our transition to clean energy. This transition will enhance energy security and mitigate the risk of future energy price shocks, particularly for the most vulnerable, promoting a just transition for all. We, therefore, commit to enhancing international cooperation and coordination on climate mitigation. Effective international cooperation can help facilitate an immediate and orderly global response to climate change, which has huge environmental benefits and has the potential to save trillions of dollars of global GDP by 2050.
  2. We recognise the potential of high integrity carbon markets and carbon pricing to foster cost- efficient reductions in emission levels, drive innovation and enable a transformation to net zero, through the optimal use of a range of policy levers to price carbon. We recognise that the risk of carbon leakage may increase with more divergent climate policy ambition and will cooperate on possible WTO-compatible mechanisms to mitigate this risk and support trade relations. We support comprehensive cooperation in the transformation and decarbonisation of our economies, in particular in hard-to-abate industrial and power sectors, and welcome ongoing work by Climate and Energy Ministers.
  3. G7 Leaders agreed to explore establishing an open, cooperative international Climate Club to support the implementation of the Paris Agreement, consistent with international rules and with participation beyond the G7. We are committed to achieving a true paradigm shift, by demonstrating that ambitious climate action is conducive to strong and sustainable growth for all economies. We had a first discussion on the Climate Club proposal based on the Presidency´s proposal for core elements of Terms of Reference for a Climate Club. We commit to intensifying discussions on the Club´s Terms of Reference within the G7 as well as with all interested ambitious partners, including developing and emerging countries in the coming months. We will come back to this issue in our meeting in October 2022.
  4. We welcome the ongoing work by international organisations on stocktaking and mapping of climate change mitigation policies within the G7 as well as globally, taking into account the complexity and heterogeneity of applied policy mixes. We are committed to sharing best practices in supporting a green and just transformation of our economies. We take note of the joint report by the IMF and the OECD on advancing climate policy ambition under heterogeneous approaches to mitigation. We commit to advancing this work together with international organisations and to work towards a common understanding of ways to compare the effectiveness in reducing emissions as well as the economic impacts of mitigation policies, such as through explicit carbon pricing, other alternative carbon mitigation approaches and carbon intensities.
  5. We recognise the significant impact of climate change and the transition to net zero on macroeconomic outcomes and fiscal sustainability within our economies and acknowledge the uneven impacts for many low- and middle-income countries and for vulnerable groups in all countries. We recognise the need to reflect the effects of climate change and the transition in our analyses and consider the impact on economic, financial and monetary decision-making, in line with our mandates. We welcome the IMF and World Bank stepping up their engagement on climate change related issues in line with each institution´s mandate and in continued collaboration with partners. G7 central banks are committed to intensifying collaboration on integrating climate risks and aspects into their macroeconomic analysis and modelling toolkit. We support further work on climate-related macroeconomic scenarios and nature-related financial risks by the Network for Greening the Financial System and the Coalition of Finance Ministers for Climate Action.
  1. We are strongly committed to achieving the collective climate finance mobilisation goal of 100 billion US dollars per year from a wide variety of sources through to 2025 to address the needs of developing countries in the context of meaningful mitigation actions and transparency on implementation. We expect this goal will be met in 2023. We agree to continue to strengthen and, where possible, increase public climate finance and mobilisation of private sector financing to meet this goal, including through tailor-made just energy transition partnerships with strong country ownership. We commit to continued G7 leadership on climate finance, including for adaptation, and to more detailed work in the Finance Track by our October meeting ahead of COP27, in close cooperation with other relevant G7 Tracks. We support the G7 Partnership for Infrastructure and Investment with the aim to jointly work towards a step change in sustainable financing of quality infrastructure.

Financial market policy and sustainability

  1. The G7 emphasises that resilience of financial markets is key to mobilising private sector finance to facilitate the whole-of-economy transition along the pathway towards sustainability and net zero. We remain committed to supporting the implementation of the G20 Sustainable Finance Roadmap and the Financial Stability Board Roadmap for Addressing Climate-related Financial Risks and welcome the related work by other international standard-setting bodies.
  2. The G7 welcomes the inauguration of the International Sustainability Standards Board (ISSB) and its progress of work on the global baseline of sustainability reporting standards. We welcome the ISSB “path to global baseline” statement of 18 May 2022 and call on all relevant stakeholders to participate in the ongoing consultation on the proposed standards. We urge the ISSB and national and regional standard-setters as well as other reporting initiatives to actively cooperate in the process of elaborating the baseline with the aim of reaching standards that can be implemented globally. The baseline should be practical, flexible and proportionate and ultimately suitable for small- and medium-size enterprises and enable jurisdictions to implement the baseline and a more extensive approach to supplement the baseline. We encourage countries to prepare or continue to prepare the ground for usage of the baseline, aim to ensure interoperability of national and regional standards and the global baseline in order to minimise fragmentation of reporting requirements, reduce reporting burdens, and enable the availability of consistent sustainability information for users. We encourage the ISSB to continue its work on sustainability reporting standards beyond climate, such as nature and social issues.
  3. The G7 welcomes market participants´ formulation of voluntary commitments to reaching net- zero emissions by 2050 and alignment with broader sustainability goals with published transition plans with transparent and credible interim targets and actions. We will continue to explore ways for the public sector to help enhance the credibility and accountability of these commitments.
  4. In line with the G20 Sustainable Finance Roadmap, the G7 calls for international organisations to take concrete steps to improve access to available public and corporate sustainability data. Repositories of sustainability data sources, such as the prototype of the Network for Greening the Financial System, should be made available to the public on a permanent basis. The G7 also supports the launch of the new G20 Data Gaps Initiative which will also focus on climate change.
  5. We recognise that the fight against money laundering linked to environmental crimes can contribute to combatting climate change as well as the loss of biodiversity. We renew our commitment to address the risks of illicit finance from environmental crime and recognise them as a cross-cutting issue. We commit to the following priority actions of the Financial Action Task Force (FATF) report “Money Laundering from Environmental Crime:” assessing the money laundering risk exposure in relation to proceeds from environmental crimes in national risk assessments as well as helping other countries to do so; facilitating knowledge-sharing and promoting awareness-raising measures on money laundering linked to environmental crimes and fostering international co-operation through a multi-stakeholder dialogue. Participants in this dialogue should include, amongst others, environment agencies, law enforcement authorities, Financial Intelligence Units, and customs authorities.
  6. The G7 welcomes the FATF´s ongoing efforts to enhance beneficial ownership transparency. We commit to fully and effectively implement the recently revised FATF standards on transparency and beneficial ownership of legal persons and in this regard reiterate our commitment to implement and strengthen beneficial ownership registries to provide efficient access to information for law enforcement agencies and competent authorities in tackling illicit finance. We also affirm the benefits of making beneficial ownership information public where possible. We call on all countries to expeditiously implement the new standard. We support the ongoing review of the FATF standards for transparency of trusts and similar legal arrangements, as well as on asset recovery. We welcome the FATF Ministers’ commitments for the FATF to do more in combating corruption.

International financial architecture

  1. We welcome the recent establishment of the Resilience and Sustainability Trust (RST) at the IMF and the pledges to the RST. We reaffirm our support for broad-based voluntary contributions in Special Drawing Rights or freely usable currencies to this Trust, which is also an important step towards achieving the total global ambition of 100 billion US dollars of voluntary contributions for countries most in need. We call for all countries with strong external positions to contribute to this effort. We commend the historic 20th replenishment of the International Development Association.
  2. Given the deteriorating and highly challenging debt situations of many developing and emerging countries with over 60% of low-income countries in debt distress or at high risk of debt distress, we recognise the urgency to improve the multilateral frameworks for debt restructurings. We underscore our commitment to successfully implementing the G20 Common Framework for Debt Treatments beyond the Debt Service Suspension Initiative, which is also endorsed by the Paris Club. The G7 encourages further efforts to ensure an accelerated implementation of the Common Framework and stands ready to support enhancements and increase predictability in order to provide more certainty for debtor countries. The G7 also continues to work with G20 partners to support and expedite debt treatments under the Common Framework.
  3. With regards to the implementation of the Common Framework, it remains essential that all relevant creditor countries including non-Paris Club countries, such as those, like China, with large outstanding claims on low-income countries facing debt sustainability challenges, contribute constructively to the necessary debt treatments as requested. We encourage the Creditor Committee for Chad to conclude a debt treatment with Chad shortly in order to reduce Chad’s debt vulnerabilities, notably resulting from oil price volatility. We stress that Chad’s private creditors are expected to provide a debt treatment in line with the comparability of treatment principle. We reiterate our commitment to swiftly form the Creditor Committee for Zambia and call upon all creditors to convene a meeting as soon as possible in order to swiftly provide financing assurances to unlock the IMF and World Bank´s timely financial support. Following Ethiopia´s re-engagement for a new IMF Extended Credit Facility, we also look forward to progress by the Creditor Committee for Ethiopia. More broadly, we re- emphasise our call for private sector involvement in all debt restructuring in line with the comparability of treatment principle and look forward to continuing work with the international financial institutions and market participants on improving the architecture for such participation.
  4. We are concerned about the current situation in Sri Lanka. We call on the authorities to ensure the respect of human rights and ask all sides to act with restraint. We are committed to a long- term solution to Sri Lanka´s economic challenges, conducive to the respect of human rights, and welcome Sri Lanka’s request for an IMF program. We encourage Sri Lanka to negotiate constructively with the IMF to conclude an ambitious but realistic agreement as soon as possible. The G7 stands ready to support the Paris Club’s efforts, in line with its principles, to address the need for a debt treatment for Sri Lanka. We strongly support creditor coordination since any Paris Club treatment is to be accompanied by comparable efforts from non-Paris Club creditor countries. We call on those countries to coordinate with the Paris Club.
  5. We reaffirm our commitment to improving transparency across all debtors and creditors, including private creditors. Enhancing debt data accuracy and transparency is crucial to secure valid debt sustainability assessments. Given the limited capacity of borrower countries to collect and report debt data accurately, we urge all G20 and Paris Club creditor countries to step in and share their lending data with the IMF and World Bank to help borrower countries secure accurate data through debt data reconciliation.

 

Treasury Announces First State Small Business Credit Initiative Awards to Support Underserved Entrepreneurs and Small Business Growth in Key Industries

WASHINGTON — Today, the U.S. Department of the Treasury announced the first group of plans approved under the new round of the State Small Business Credit Initiative (SSBCI). The American Rescue Plan reauthorized and expanded SSBCI, which was originally established in 2010 and was highly successful in increasing access to capital for traditionally underserved small businesses and entrepreneurs. The new SSBCI builds on this successful model by providing nearly $10 billion to states, the District of Columbia, territories, and Tribal governments to increase access to capital and promote entrepreneurship, especially in traditionally underserved communities as they emerge from the pandemic. SSBCI funding is expected to catalyze up to $10 of private investment for every $1 of SSBCI capital funding, amplifying the effects of this funding and providing small business owners with the resources they need to sustainably grow and thrive. State governments submitted plans to Treasury for how they will use their SSBCI allocation to provide funding to small businesses, including through venture capital programs, loan participation programs, loan guarantee programs, collateral support programs, and capital access programs.

“This historic investment will help reduce the barriers that prevent small businesses and entrepreneurs from getting their ideas off the ground, building successful businesses, and creating jobs, especially in traditionally underserved communities where these opportunities are needed most,” said Deputy Secretary of the Treasury Wally Adeyemo. “Treasury is encouraged by these plans and their support for key industries, including manufacturing and the environmental sector.”

A White House report released earlier this month found that more Americans are starting new businesses than ever before. In 2021, Americans applied to start 5.4 million new businesses – 20 percent more than any other year on record. It also found that small businesses are creating more jobs than ever before, with businesses with fewer than 50 workers creating 1.9 million jobs in the first three quarters of 2021 – the highest rate of small business job creation ever recorded in a single year. The investments being made through SSBCI are a key part of the Biden Administration’s strategy to keep this small business boom going by expanding access to capital and by providing entrepreneurs the resources they need to succeed. The work Treasury has done through the implementation process to ensure SSBCI funds reach traditionally underserved small businesses and entrepreneurs will also be critical to ensuring the small business boom not only continues but also lifts up communities disproportionately impacted by the pandemic. 

Today, Treasury is also announcing that it will have specialized programming to enable jurisdictions to share best practices for targeting investments in key industries and businesses owned by underserved entrepreneurs. Treasury strongly encourages jurisdictions to implement their plans in ways that support industries especially important to the U.S. economy – including small businesses that promote American manufacturing, strengthen critical supply chains, and invest in clean energy and renewables to secure our nation’s energy independence. Treasury has structured SSBCI to ensure that these funds will reach underserved small businesses and entrepreneurs in need of access to capital, including by providing $1 billion in incentive funds for jurisdictions that successfully reach underserved entrepreneurs and through its recent announcement of plans to deploy $300 million in technical assistance to reach businesses and entrepreneurs in need of assistance, including through the transfer of funds to the Minority Business Development Agency. Treasury continues to strongly encourage recipients to reach small businesses that provide jobs that pay a living wage, which will help American workers emerge stronger from the pandemic.

The first recipients under the SSBCI program plan to target key industries and small businesses in need of access to capital. Treasury intends to continue approving plans on a rolling basis. The following descriptions highlight some of the programs that Treasury has approved for these states.

  • Hawaii, approved for up to $62,021,957, will launch new loan participation and credit enhancement programs, including HI-CAP Loans and HI-CAP Collateral, with two-thirds of its allocation. These programs will expand access to capital for underserved communities by lending to projects that will diversify Hawaii’s economy and lessen its reliance on tourism, which incurred high rates of business failures and unemployment during the COVID-19 pandemic. Hawaii will also operate a venture capital program, the HI-CAP Invest program, which will include investments in impact funds that target early-stage businesses focused on social or environmental change in Hawaii.
  • Kansas, approved for up to $69,596,847, will operate a loan participation program, the GROWKS Loan Fund, and an equity program, the GROWKS Angel Capital Support Program, with over 80 percent of its funds. These programs will expand access to capital for underserved communities by providing companion loans and equity investments with varying levels of SSBCI support. Kansas estimates that approximately 40 percent of businesses supported will be women-owned and 20 percent will be minority-owned small businesses.
  • Maryland, approved for up to $198,404,958, will operate eight loan and equity investment programs through Maryland Department of Housing and Community Development (DHCD), Maryland Department of Commerce and Maryland Technology Economic Development Corporation. Among the approved programs is the Maryland Small Business Development Financing Authority (MSBDFA), a program at the Department of Commerce, which will expand access to capital for underserved communities by targeting loans to underserved businesses. Maryland anticipates that 70 percent of new loans in the SSBCI-funded program will be provided to minority-owned businesses and 40 percent to women-owned businesses. Maryland will also use $17 million to fund the Neighborhood Business Works Venture Debt Program, which will expand access to capital for underserved communities by lending alongside venture capital equity in high-growth businesses located in qualified low-income communities, anchoring the businesses in these communities through federal tax incentives that require them to remain in low-income communities for several years.
  • Michigan, approved for up to $236,990,950, has been an innovator in developing credit support programs given the challenges of the manufacturing sector there for the last several decades. Michigan’s top industry assisted in the previous iteration of SSBCI, in both lending and venture capital, was manufacturing. With these funds, the state will operate the Michigan Business Growth Fund Collateral Support Program with nearly one-third of its allocation. This existing program provides cash collateral accounts to lending institutions to enhance the collateral coverage of borrowers so that they qualify for loans. Historically the program has targeted industries with high wages and high job growth potential, such as manufacturing, medical device technology, engineering, and agribusiness. Michigan will expand the program to reach smaller service and retail businesses disproportionately hurt by COVID-19. 
  • West Virginia, approved for up to $72,104,798, will operate a seed capital co-investment fund with more than half of its allocation, increasing small businesses’ access to venture capital in a state with no resident venture capital firms and average annual venture capital investment well below the per-capita national average. The fund will focus on expanding access to capital for underserved communities by providing equity investments matched with private equity from angel investors or venture capital funds. Statewide and regional nonprofits and community development financial institutions (CDFIs) will partner with community banks and CDFIs to use the remaining balance of the funds for two loan programs that will serve the needs of West Virginia businesses.

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Treasury Targets Hizballah Financial Network’s Abuse of the Business Sector

WASHINGTON – Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated Ahmad Jalal Reda Abdallah, a Lebanese businessman and Hizballah financial facilitator, as well as five of his associates and eight of his companies in Lebanon and Iraq. This action illuminates Hizballah’s modus operandi of using the cover of seemingly legitimate businesses to generate revenue and leverage commercial investments across a multitude of sectors to secretly fund Hizballah and its terrorist activities. It also demonstrates how Hizballah goes to great lengths to establish companies with opaque ownership structure in order to conceal their involvement in these businesses, and also their involvement in criminal activities such as altering of medication labels for black market pharmaceutical sales.

“Hizballah has built a web of businesses to hide its activities and generate funds for its destabilizing activities, all at the expense of accountability and public safety in Lebanon and the region,” said Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian E. Nelson. The designation of this network demonstrates the U.S. government’s commitment to protect Lebanon’s private sector and financial system from Hizballah’s abuse by targeting and exposing the group’s financial activities.”

OFAC is designating Ahmad Jalal Reda Abdallah and his network of associates and companies under Executive Order (E.O.) 13224, as amended, which targets terrorists, leaders, and other officials of terrorist groups, and those providing support to acts of terrorism or persons blocked under E.O 13224. The United States designated Hizballah as a Foreign Terrorist Organization (FTO) on October 8, 1997, and as a Specially Designated Global Terrorist (SDGT) on October 31, 2001. 

Ahmad Jalal Reda Abdallah (Ahmad Abdallah)

Ahmad Abdallah is a Hizballah official and an active member of Hizballah’s global financial network who has supported Hizballah for decades, carrying out extensive commercial activities in various countries where the profits are transferred to Hizballah. He coordinates business activities and budgets with sanctioned senior Hizballah financial facilitators such as Muhammad Qasir and Muhammad Qasim al-Bazzal. In addition to the involvement of Muhammad Qasir and Muhammad Qasim al-Bazzal, Islamic Revolutionary Guard Corps (IRGC) officials have helped to facilitate financial transfers for Ahmad Abdallah’s businesses, many of which are located in Iraq and benefit Hizballah.

Ahmad Abdallah has worked with Muhammad Qasir to pursue a business plan together to finance businesses and generate funding for Hizballah. Ahmad Abdallah has established a multitude of businesses including medical equipment factories, insurance companies, real estate, and construction companies, which funnel at least a portion of their profits to Hizballah. Ahmad Abdallah pursued the establishment of food companies such as Al Moukhtar Products Co. SARL, which is designated today, because he perceived those sectors as less likely to be targets of sanctions. Abdallah also used his senior employees and relatives to establish new businesses throughout the Middle East on behalf of Hizballah.

In addition to his business ventures where profits were used to benefit Hizballah, Ahmad Abdallah also brokered meetings with senior businessmen and politicians in Lebanon on Hizballah’s behalf. Ahmad Abdallah has also assisted Hizballah in recovering Adham Tabaja’s frozen funds after he was designated in 2015.

Ahmad Jalal Reda Abdallah is being designated pursuant to E.O. 13224, as amended, for

acting or purporting to act for or on behalf of, directly or indirectly, Hizballah.

Abdallah’s Network

Ahmad Abdallah used his senior employees, including Hussein Kamel Attia (Hussein Attia), to establish businesses throughout the Middle East on behalf of Hizballah. Hussein Attia and other employees and relatives helped provide an appearance of legitimacy for these businesses. Hussein Attia is a senior manager at United General Holding, which served as a holding company for numerous businesses owned or controlled by Ahmad Abdallah. Hussein Attia was involved in operations for Ahmad Abdallah’s businesses, including financial transactions and business operations. Hussein Attia is associated with several of Ahmad Abdallah’s companies and has maintained business and financial connections to Ahmad Abdallah and his companies since at least 2016.

Hussein Kamel Attia is being designated pursuant to E.O. 13224, as amended, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Ahmad Abdallah.

Joseph Ilya Haidamous (Joseph Haidamous), another senior employee of Ahmad Abdallah, helped him establish new businesses throughout the Middle East on behalf of Hizballah. Joseph Haidamous served as an intermediary for financial transactions between prominent Hizballah officials and Ahmad Abdallah and was responsible for providing financial reports to those same Hizballah officials. Joseph Haidamous was also involved in establishing and registering companies linked to Ahmad Abdallah for the purpose of generating profits for Hizballah. As the Chief Financial Officer for United General Holding, Joseph Haidamous was deeply involved in managing the finances for Ahmad Abdallah’s companies.

Joseph Ilya Haidamous is being designated for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Hizballah.

Ahmad Abdallah also used his relatives to establish new businesses throughout the Middle East on behalf of Hizballah. When accounts were opened for several of Ahmad Abdallah’s businesses, his brother Hussein Reda Abdallah was one of the associates given power of attorney for the accounts. Hussein Reda Abdallah is associated with several of Ahmad Abdallah’s companies, including United General Holding, United General Offshore, United General Services, and Al Moukhtar Products Co. SARL. He has also shared bank accounts with his brother Ahmad Abdallah and worked as an employee at a company owned by his brother Ahmad Abdallah.

Hussein Reda Abdallah is being designated for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Ahmad Abdallah.

Ali Reda Abdallah, Ahmad Abdallah’s other brother, coordinated closely with Ahmad Abdallah in 2020 to further their investment projects in Iraq on behalf of Hizballah. When accounts were opened for several of Ahmad Abdallah’s businesses, Ali Reda Abdallah was one of the associates given power of attorney for the accounts. Additionally, when Ahmad Abdallah restructured the ownership for several of the companies that he owned in Iraq with Ali Reda Abdallah, he planned to transfer 100 percent of the ownership for one of the companies to Ali Reda Abdallah. As of March 2020, Ahmad Abdallah and his brother Ali Reda Abdallah had stepped forward from Hizballah to purchase a bottling plant in Iraq. The purchase was viewed as part of an effort by Hizballah to open intelligence and commercial fronts in Iraq for investment projects, which could then become fronts for IRGC and Hizballah in the country. Subsequently, a local law enforcement raid at one of the plants was conducted and Ahmad Abdallah was caught altering labels on medications brought in from Lebanon and sold on the black market to pharmacies.

Ali Reda Abdallah was associated with several Ahmad Abdallah companies, including United International Exhibition Company, and had financial connections to several other companies, including United General Contracting, Al Moukhtar Products Co. SARL, and United General Holding.

Ali Reda Abdallah was expelled from Sweden in the 1990s and deported as a result of his activities on behalf of Hizballah and for plotting an attack on the Israeli Embassy in Stockholm.

Ali Reda Abdallah is being designated for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Ahmad Abdallah.

As of 2020, Hussein Ahmad Jalal Abdallah, son of Ahmad Abdallah, helped coordinate business logistics for his father. His father delegated authority to him for a project that was tied to Hizballah. Hussein Ahmad Jalal Abdallah also had numerous financial ties to his father and his father’s companies.

Hussein Ahmad Jalal Abdallah is being designated for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Ahmad Abdallah.

United General Holding SAL was used by Ahmad Abdallah and senior Hizballah officials like Muhammad Qasir to create business, legal, and regulatory infrastructure to benefit Hizballah and enable the import of Iranian oil on behalf of Hizballah. Employees including Hussein Attia were leveraged to provide the appearance of legitimacy. Ahmad Abdallah is the founder and CEO of United General Holding and holds 60.5 percent of the company shares.

United General Holding SAL is being designated for being owned, controlled, or directed by, directly or indirectly, Ahmad Abdallah.

United General Offshore SAL was one of several subsidiaries held by United General Holding. It was incorporated in Lebanon and also operated in Iraq. Ahmad Abdallah is the founder and CEO of United General Offshore and holds 60 percent of the company shares. Moreover, his holding company, United General Holding, owns 30 percent of the company and his brother Hussein Reda Abdallah owns the last 10 percent.

United General Offshore SAL is being designated for being owned, controlled, or directed by, directly or indirectly, Ahmad Abdallah.

United General Services SARL was one of several subsidiaries held by United General Holding and was incorporated in Lebanon. Ahmad Abdallah is the founder and CEO of United General Services and owns 75 percent of the company.

United General Services SARL is being designated for being owned, controlled, or directed by, directly or indirectly, Ahmad Abdallah.

United General Contracting Company SARL was one of several subsidiaries held by United General Holding. United General Holding maintains 60 percent ownership of United General Contracting Company. The company is involved in construction and engineering projects and works closely with other companies owned or controlled or associated with Ahmad Abdallah.

United General Contracting Company SARL is being designated for being owned, controlled, or directed by, directly or indirectly, United General Holding.

Al Moukhtar Products Co. SARL (Al Moukhtar) was one of several subsidiaries of United General Holding. United General Holding owns 80 percent of Al-Moukhtar. Senior Hizballah officials, including Mohammad Qasir, were involved in the business activities of Al-Moukhtar, a Lebanon-based food company engaged in the import and export of food products from Lebanon, Turkey, Iran, Syria, and Iraq. Ahmad Abdallah was interested in food companies because the food sector appeared to be less likely targets of sanctions.

Al Moukhtar Products Co. SARL is being designated for being owned, controlled, or directed by, directly or indirectly, United General Holding.

United General Holding owns 51 percent of Focus Company SARL. Ahmad Abdallah-owned United General Holding holds several subsidiaries, including Focus Company SARL, one of several businesses owned by Ahmad Abdallah whose profits are transferred to Hizballah.

Focus Company SARL is being designated for being owned, controlled, or directed by, directly or indirectly, United General Holding.

Focus Company SARL holds 720 out of 1200 shares of Focus Media Company SAL Offshore. Ahmad Abdallah also holds 240 shares. Focus Media Company SAL Offshore is one of many business ventures in Iraq that Ahmad Abdallah is involved in on behalf of Hizballah.

Focus Media Company SAL Offshore is being designated for being owned, controlled, or directed by, directly or indirectly, Focus Company SARL.

United International Exhibition Company SARL  is owned by United General Holding, with 60 percent of the company’s shares. United General Holding held several subsidiaries, including United International Exhibition Company SARL which is publicly listed as a “sister company” on the United General Services website, along with numerous other companies tied to Ahmad Abdallah.

United International Exhibition Company SARL is being designated for being owned, controlled, or directed by, directly or indirectly, United General Holding.

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of these individuals and entities named above, and of any entities that are owned, directly or indirectly, 50 percent or more by them, individually, or with other blocked persons, that are in the United States or in the possession or control of U.S. persons must be blocked and reported to OFAC. Unless authorized by a general or specific license issued by OFAC or otherwise exempt, OFAC’s regulations

generally prohibit all transactions by U.S. persons or within the United States (including transactions transiting the United States) that involve any property or interests in property of designated or otherwise blocked persons.

Furthermore, engaging in certain transactions with the individuals and entity designated today entails risk of secondary sanctions pursuant to E.O. 13224, as amended. Certain individuals

being designated today are subject to the Hizballah Financial Sanctions Regulations, which implements the Hizballah International Financing Prevention Act of 2015, as amended by the Hizballah International Financing Prevention Amendments Act of 2018. Pursuant to these authorities, OFAC can prohibit or impose strict conditions on the opening or maintaining in the United States of a correspondent account or a payable-through account by a foreign financial institution that either knowingly conducted or facilitated any significant transaction on behalf of an SDGT or, among other things, knowingly facilitates a significant transaction for Hizballah or certain persons designated for their connection to Hizballah.

The power and integrity of OFAC sanctions derive not only from its ability to designate and add persons to the SDN List, but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior. For information concerning the process for seeking removal from any OFAC list, including the Specially Designated Nationals and Blocked Persons List, please refer to OFAC’s Frequently Asked Question 897. Additional information regarding sanctions programs administered by OFAC.

Click here to view identifying information on the individuals and entities designed today.

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Peloton Interactive, Inc. Announces Participation in the J.P. Morgan Global Technology, Media and Communications Conference

NEW YORK, May 18, 2022 (GLOBE NEWSWIRE) — Peloton Interactive, Inc. (Nasdaq: PTON) today announced that the Company will be participating in the J.P. Morgan Global Technology, Media and Communications Conference on Tuesday, May 24, 2022, at 10:50 AM ET. Attending for Peloton will be Barry McCarthy, President and Chief Executive Officer.

The audio portion of the presentation will be webcast live over the internet and can be accessed at https://investor.onepeloton.com.

About Peloton
Peloton is the leading interactive fitness platform in the world with a loyal community of more than 7.0 million Members. The company pioneered connected, technology-enabled fitness, and the streaming of immersive, instructor-led boutique classes for its Members anytime, anywhere. Peloton makes fitness entertaining, approachable, effective, and convenient, while fostering social connections that encourage its Members to be the best versions of themselves. An innovator at the nexus of fitness, technology, and media, Peloton has reinvented the fitness industry by developing a first-of-its-kind subscription platform that seamlessly combines the best equipment, proprietary networked software, and world-class streaming digital fitness and wellness content, creating a product that its Members love. Consumers can access the brand’s immersive content through the Peloton Bike, Peloton Tread, Peloton Bike+, Peloton Guide and Peloton App, which allows access to a full slate of fitness classes across disciplines, on any iOS or Android device, Apple TV, Fire TV, Roku TVs, and Chromecast and Android TV. Organizations and enterprises have the opportunity to access select Peloton products and the platform for their teams and customers through Peloton Corporate Wellness or Peloton Commercial. Founded in 2012 and headquartered in New York City, Peloton has a number of retail showrooms across the US, UK, Canada, Germany, and Australia. For more information, visit www.onepeloton.com

Investor Relations Contact: Peter Stabler[email protected] 


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Source: Peloton Interactive

Acting Comptroller Issues Statement on Passing of John W. Ryan, President and CEO of the Conference of State Bank Supervisors

News Release 2022-57 | May 18, 2022

WASHINGTON—Acting Comptroller of the Currency Michael J. Hsu issued the following statement on the passing of John W. Ryan, President and CEO of the Conference of State Bank Supervisors (CSBS).

I was deeply saddened to hear of the death of John W. Ryan, President and CEO of the Conference of State Bank Supervisors. Throughout his long career in banking and financial services, John demonstrated unparalleled dedication to his work. His steadfast support for state regulators and his commitment to strong state financial supervision was a tremendous asset to state banks and their consumers and communities across the nation.

I had the honor of working with John and enjoyed our lively conversations. I also appreciated his openness to exploring ways for the OCC and CSBS to collaborate to raise the bar on bank regulation to benefit the nation’s financial system.

John’s steady leadership will be greatly missed. On behalf of the OCC, I extend my heartfelt condolences to John’s family, friends, colleagues and constituents across the country.

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Media Contact

Stephanie Collins
(202) 649-6870

READOUT: Deputy Secretary Adeyemo Convenes Roundtable Discussion to Develop a Modernized, Equitable IRS

WASHINGTON—Today, U.S. Deputy Secretary of the Treasury Wally Adeyemo convened a roundtable discussion with key tax and equity policy stakeholders on ways to modernize and ensure a more equitable tax administration in the years ahead.

Together with leaders joining virtually and in-person, Deputy Secretary Adeyemo focused on the IRS’s increased role as a benefits administrator – particularly for low-income Americans – within the federal government and the U.S. economy, and the American Rescue Plan’s Child Tax Credit as an ongoing case study. Participants also discussed the importance of overhauling tax enforcement to create a more equitable tax code, and Adeyemo underscored the need to prioritize IRS investments to achieve that goal.

The Deputy Secretary and U.S. Treasury officials, including Assistant Secretary for Tax Policy Lily Batchelder, Counselor for Racial Equity Janis Bowdler, Counselor for Tax Policy and Implementation Natasha Sarin, and Senior Advisor Michael Schmidt were joined by:

  • Urban Institute
  • National Urban League
  • Americans for Tax Fairness
  • Black Economic Alliance
  • Joint Center for Political and Economic Studies
  • Urban-Brookings Tax Policy Center
  • Public Citizen
  • Center for American Progress
  • Institute on Taxation and Economic Policy
  • Urban-Brookings Tax Center
  • National Women’s Law Center
  • Center on Budget and Policy Priorities
  • Community Change Action
  • Unidos US
  • Center for a New Economy
  • Prosperity Now
  • Community Change

 

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U.S. Department of the Treasury Welcomes IFI Action Plan to Address Food Insecurity

WASHINGTON – Today, the U.S. Department of the Treasury welcomed the IFI Action Plan to Address Food Insecurity developed by the Asian Development Bank (ADB), the African Development Bank (AfDB), the European Bank for Reconstruction and Development (EBRD), the International Fund for Agricultural Development (IFAD), the Inter-American Development Bank (IDB), the International Monetary Fund (IMF) and the World Bank Group. This Action Plan stems from a meeting convened in April 2022 by Secretary Yellen on “Tackling Food Insecurity – The Challenge and Call to Action”, which included the heads of the IMF, World Bank, IFAD, and the Finance Ministers of Indonesia and Germany representing the G20 and the G7, respectively, as well as lead technical experts on food security and agriculture from the International Financial Institutions (IFIs).

The Russian war against Ukraine is the latest global shock that is exacerbating the sharp increase in both acute and chronic food insecurity in recent years driven by conflict, climate change and economic downturns, such as those associated with the COVID-19 pandemic.  The IFIs are working swiftly to bring to bear their financing, policy engagement, technical assistance, and knowledge work to address rising food insecurity.  The IFI Action Plan to Address Food Insecurity details how IFIs are stepping up, surging, and scaling their work on food security and agriculture.  Highlights include:

  • The Asian Development Bank (ADB) is working with the World Food Program (WFP) and the Food Agriculture Organization (FAO) to address severe food insecurity through emergency food assistance, food-for-work and cash-for-work programs.  In Afghanistan, ADB is financing $200 million for sustaining essential food and livelihood-related services to the vulnerable communities and will re-align planned activities as necessary to respond to immediate needs. In Sri Lanka, ADB is supporting the country to address food insecurity challenges through repurposing its existing portfolio. The assistance may include cash transfer to the poor and vulnerable groups and livelihood development program in relation to food and nutrition. In addition, ADB is also exploring different options of trade finance and private sector loans to support food imports.
  • As part of the African Emergency Food Production Facility, a proposed $1.5 billion facility, the African Development Bank (AfDB) will deliver climate-smart, certified seed, fertilizer and extension services to 20 million farmers, as well as provide financing support for large-scale procurement of fertilizer to African countries through wholesalers and credit guarantees to aggregators, local input suppliers, and other players along the fertilizer value chain.  The Facility also aims to support policy reforms facilitating modern agritech to farmers, including strengthening African national institutional capacity to oversee input and output markets. The AfDB is also seeking opportunities to provide budget support to certain countries to support vulnerable consumers. 
  • The European Bank for Reconstruction and Development’s (EBRD) Resilience and Livelihood Framework will support businesses and public services across all sectors affected by the war in Ukraine and neighboring countries with a package of investments expected to reach €2 billion over the next two years.  Food security and trade finance of agricultural and food products are expected to represent €500 million, of which €200 million is for Ukraine and €300 million is for neighboring countries.
  • The Inter-American Development Bank (IDB) will support countries to broaden and deepen social programs that target food insecure people and households, including through unconditional cash transfers, food vouchers, school meals, and other programs.  IDB is preparing a $60 million cash transfer program for Haiti that will support vulnerable populations, as well as similar activities in Honduras. Also, the IDB aims to finance investment projects and technical cooperation for over $400 million in 2022 to increase food systems’ resilience, inclusiveness, and productivity in Latin America and the Caribbean.
  • The International Fund for Agricultural Development (IFAD) will aim to invest $3.5 billion in 78 countries to build the resilience of the world’s poorest and most vulnerable rural people to current global challenges, including the Ukraine crisis and other food system shocks over the next three years. IFAD’s newly launched Crisis Response Initiative aims to address short-term food security needs in 22 countries primarily in Africa, and Asia.  IFAD has received initial pledges of €11 million for the Crisis Response Initiative.
  • The International Monetary Fund (IMF) will support countries affected by food insecurity with the full range of its instruments, focusing on its macroeconomic expertise. Working closely with the World Bank and other IFIs, the IMF will provide policy advice, capacity development assistance, and financial support either through programs or emergency financing. The IMF will work with country authorities on macroeconomic frameworks, improving social safety nets to protect vulnerable households from the imminent threat of food insecurity, and safeguarding food security without resorting to export restrictions. These policy objectives are reflected in program engagement. IMF financing support for Moldova and Mozambique, for instance, includes a focus on strengthening social safety nets.  
  • The World Bank Group response is global and will provide clients with comprehensive, streamlined solutions to the impacts of the crisis with $30 billion available for the next 15 months, comprising $12 billion towards new projects and about $18 billion of undisbursed balance in the existing portfolio of projects linked to food and nutrition security.   It will assist clients and partners to mitigate against the short-term negative impacts on food and nutrition security of the current global food and fertilizer price crises while remaining focused on medium- and longer-term actions that create pathways out of the crisis and greater resilience to price spikes going forward.  The World Bank’s global response will address four priorities: (i) Facilitate unhindered trade: Build international consensus (G7, G20, others) and commitment to avoid export restrictions that exacerbate global food price increases: (ii) Support consumers: Scale up nutrition-sensitive social protection programs and replenish early-response financing mechanisms to protect vulnerable households (including in some exceptional circumstances directly financing the food imports); (iii) Support producers: Ensure next season’s production by removing input trade barriers, focusing on more efficient use of fertilizers, repurposing public policies and expenditures to better support farmers; and (iv) Invest in sustainable food and nutrition security: Strengthen food systems to make them more resilient to rising risks (conflict, climate, pests, diseases), trade disruptions and economic shocks – balance immediate/short term needs with long-term investment for transforming the food system.

See the full plan here .

Transcript of Press Conference from Secretary of the Treasury Janet L. Yellen in Bonn, Germany

Thank you for being here. This has been a very productive week already, and I am looking forward to the G7 Ministerial here in Bonn this week. First, I’d like to thank Minister Lindner for his leadership.

I have spent the week in Warsaw and Brussels before arriving here in Bonn. The backdrop against this trip is, of course, Russia’s illegal and unprovoked war against Ukraine.

My thoughts continue to be with the people of Ukraine as they fight back against Putin’s brutal invasion into their homeland. I was honored to join and hear from refugees that have been welcomed to Poland who were generous enough to share their experiences and who embody the strength of the Ukrainian people.

Treasury is committed to doing what we can to ensure that Putin’s brutal war continues to be met with fierce resistance internationally. The United States and more than 30 of our partners – representing well over half the world’s economy – have imposed unprecedented financial pressure measures on Russia and its leadership, and are firm in our resolve to hold Putin accountable and to strengthen the hand of the Ukrainian as the invasion continues.

Thanks to this unity, the sanctions imposed against the Russian Federation have already had enormous impact – Russia is experiencing recession, high inflation, acute challenges in their financial system and an inability to procure the materials and products they need to support their war or their economy.

In the next two days, I will work with my G7 counterparts to ensure we continue to stand together to uphold our shared principles and extend our cooperation to boosting our support for Ukraine. I expect that the Senate will respond to the President’s request and pass a package of $40 billion in security, economic, and humanitarian aid soon. In Bonn, I will ask my G7 counterparts to join us in increasing their financial support to Ukraine. Ukraine has done remarkable work to repel Russia’s invasion but they need our help and they need it now.

Zooming out though, Russia’s war against Ukraine has exacerbated the issue of food security for people around the word, particularly in emerging and developing countries. I am deeply concerned by how this is unfolding. There is a very real risk that soaring global market prices of food and fertilizer will result in more people going hungry, further exacerbate price pressures, and harm government fiscal and external positions. At my direction, International Financial Institutions, including the IMF and World Bank, have developed an action plan to address the threat. These IFIs have started surging billions in resources — for example, the World Bank is mobilizing over $1.9 billion – details of which were announced earlier today. This has been important progress but we need to double down on our efforts to ensure people around the world can feed their families.

Finally, it is no secret that I am keenly focused on moving forward on the global agreement on international tax reform, including a global minimum tax that will level the playing field and raise crucial revenues to benefit people around the world. Last fall, 137 countries – representing nearly 95% of the world’s GDP – agreed last fall on a deal that will stabilize our tax systems, provide resources to invest in security and respond to crises like Covid-19, and ensure corporations fairly share the burden of financing government. I know my counterparts in the G7 share my sense of urgency and I look forward to discussing the next steps with them.

And with that, I am happy to take your questions

 

Q & A

 

Q: Given all the challenges that you just mentioned, what do you see right now as being the biggest risk to the global economy? What can you and your counterparts here this week do to help avert a global recession?

 

SEC. YELLEN: Well, certainly the economic outlook globally is challenging, and uncertain, and higher food and energy prices are having stagflation airy effects, namely, depressing output and spending and raising inflation all around the world.

The United States, in many ways is best positioned, I think, to meet this challenge, given the strength of our labor market and the economy. We understood when Russia invaded Ukraine, and we decided to respond, that there would be spillover effects, and that we are prepared to pay, but we’re doing everything we can to make sure that the sanctions have the minimum negative impact on ourselves, on Europe, on other countries, emerging markets, developing countries, and the maximum impact on Russia.

And many of the discussions we have had, and will continue to have, as we continue to put sanctions in place will be about how best to design them to shield the global economy from the adverse effects while imposing maximum harm on Russia and Putin.

And, of course, specifically, with respect to oil prices, the President announced jointly with other partners, in our case large releases of a million barrels a day of oil from the Strategic Petroleum Reserve that I think is helping to stop oil prices from rising even further and giving a window in which supply can ramp up.

 

Q: Thank you. Good afternoon, Secretary Yellen, Chris Condon from Bloomberg News. In recent months, Secretary Yellen, the US dollar has appreciated significantly against many other currencies, and part of that is, of course, a natural result of the expectation for higher interest rates in the US. But the extent of that strengthening has surprised and even alarmed some market participants and some governments. Could you assess if that strengthening were to continue how worried would you be on two levels first about the US domestic economy, given its potential impact on export manufacturers, and also on the many countries around the world that carry significant levels of dollar denominated debt? Would you be worried about it provoking a debt crisis? And finally, would the administration advise that anything could or should be done about this scenario? Thank you.

 

SEC. YELLEN: So let me say from the standpoint of the administration, we’re committed to a market determined exchange rate, although we have made clear that actions that countries specifically take to push down the value of their currencies in order to distort trade in their favor, that we will respond to that. But we have a market determined exchange rate and think that’s the best regime. I think you pointed to one factor, tighter monetary policy in the United States rising interest rates, that is causing capital to flow toward the United States and into dollars.

Also, at a time of kind of risk off and uncertainty. It’s natural. The dollar is a global safe haven. And we tend to experience inflows naturally that push up the dollar in highly uncertain economic times. So, I think it’s understandable that the dollar has risen. But you pointed to impacts on other countries and that is a concern.

There are many countries with dollar denominated debt and a rising dollar makes it more difficult for countries to bear that debt. We know that often emerging markets worry about how they will fare in an environment of higher interest rates and tightening monetary policy.

I saw that one myself when I was Fed Chair and we began to tighten, and I think continuing to keep our neighbors well informed that the Fed, of course runs an independent monetary policy, but attempting to be clear about what our policy is, I think is an important strategy for helping our neighbors adjust.

 

Q: You’ve spoken before about the possibility of Russian Central Bank reserves being used to fund to defend Ukraine and to rebuild the country. You’ve also spoken about how there would be a need between counterparts to do so. Can you elaborate a bit on some of the conversations that have been had regarding that possible effort with the Russian Central Bank? And also, could you talk a little bit about what sanctions options are left available, and what are some of the most severe that could be imposed and when they would potentially be imposed?

 

SEC. YELLEN: So, with respect to the assets of the Russian Central Bank, they’re obviously substantial. I think the United States and our partners, it’s estimated have blocked around $300 billion of those assets. And I think it’s very natural that given the enormous destruction in Ukraine, and huge rebuilding costs that they will face that we will look to Russia to help pay at least a portion of the price that will be involved.

That said, while we’re beginning to look at this, it would not be legal now, in the United States, for the government to seize those statutes. It’s not something that is legally permissible in the United States. Other countries have, you know, legal issues around it as well and there really are a number of issues.

Conversations are really just beginning among countries about how to finance longer term reconstruction and whether or not those assets should play a role, and if so, how. So, I don’t really have a lot further news for you on that.

 

Q: I have a question on inflation for you, again, because inflation, also in the United States, but here in Europe is starting to potentially get out of control. So how concerned are you about that? And is that one reason why you are floating the idea of having tariffs on oil exports from Russia and not an outright ban from the European Union? Thank you.

 

SEC. YELLEN: So, inflation clearly is a concern in many parts of the world, in the United States, in the UK, and in in the rest of Europe as well and clearly, higher energy prices, higher food prices are, and other commodity prices, really due to Putin’s choice to launch a war against Ukraine are really responsible for much of that. And we understood that there would be consequences that we would not be able to shield ourselves entirely from economic consequences, but the principles that all of us have adopted.

As we consider what sanctions packages to adopt, are, as I said, we want to have the maximum impact, we can on Russia the maximum negative impact to degrade their ability to wage war now and project power in the years ahead, and to minimize the negative spillovers to ourselves. As we contemplate energy sanctions and other sanctions, this is always the core of the conversations that we’ve had.

So, the European Union has made clear that they intend to end oil imports by the end of this year. That gives a significant amount of time to make sure that it can be done in an orderly way, and so that there won’t be price spikes associated with it.

In the meantime, discussions are ongoing. All of us share the objective of diminishing the revenues that Russia will have to buy goods and services that will help their economy and enable them to wage war. We’re doing a lot of things that are effective in diminishing their access to the goods and services that they need.

Just very recently, it was announced that the two major tank producing firms who have had to shut down operations because of inability to get necessary parts and materials but shutting off oil and gas revenues are a very substantial source of revenues for Russia. We would like to do what we could to diminish those revenues going to Russia. And so a number of ideas have been discussed.

You’ve probably heard tariffs, price caps are three possibilities that are on the table. We continue to look at those things, no decisions have been made. You know, this is important for Europe to decide what they think is best. But we continue to have those discussions there are a lot of options but those are the objectives.

 

Q: We’ve seen continued increases in gas prices, can you talk a little bit about when Americans can see relief from the administration’s actions, and if you anticipate the problem will get worse before it gets better this summer.

 

SEC. YELLEN: So, you know, I’m not going to try to forecast the exact path of gas prices for you. But the global price of oil is stabilized, you know around a little bit over $100. And, you know, of course, that means higher gas prices than Americans want. We’ve seen in some time, I think is supply begins to ramp up, we expect to see a significant supply response in the United States and other parts of the world.

In the meantime, the releases from the Strategic Petroleum Reserve, I think are serving to basically stabilize prices.  We’re doing what we can to avoid further increases in energy prices. But, you know, we also want to make sure that Europe especially wean itself from dependence on reliance on Russia for oil and gas, and these pressures are not likely to abate in the very near future.

 

Q: Thanks, Secretary. Yesterday you called for and allies to sort of confront China together. How concerned are you about the lockdowns that are going on in China right now? You know, they are the producer for the world. How big of a threat is this to the global economy, what we discuss about it? And, also, if you could talk about your views on tariffs, the U.S. tariffs on Chinese goods under the Section 301? What are you telling your counterparts within the administration that we should do about these? Thank you.

 

SEC. YELLEN: So, with respect to China, certainly the lockdowns look like they are impeding the production and flow of goods and services, given how extensive they are, and compounding supply chain difficulties that we’ve had that have boosted prices, although some of those pressures seem to be mitigating the developments in China exacerbate those supply chain pressures. And so that’s a source of concern.

China also seems to be experiencing a slowdown in growth. And as one of the largest economies in the in the globe, China’s economic performance really has spillover impacts on growth all around the world. And so that that is a factor that affects the global outlook and we’re monitoring carefully what happens in, what happens in China and what their policy responses are.

With respect to tariffs, discussions about tariffs are underway in the administration. I’ve said previously that I think that some of the tariffs that were imposed by President Trump in retaliation for China’s unfair trade practices, some of them, to me seem as though they impose more harm on consumers and businesses and aren’t very strategic in the sense of addressing real issues we have with China, whether it concerns supply chain vulnerabilities, national security issues, or other unfair trade practices.

And so, I see a case not only because of inflation, but because there would be benefits to consumers and firms from some of the tariffs, that some relief could come from cutting some of them. But we’re, we’re having these discussions. There are a variety of impacts. There are a variety of opinions. And we really haven’t sorted it out yet come to agreement on where to be where to be on tariffs. And, you know, I respect the opinions I heard, I hear expressed around some policy tables, there are a variety of valid concerns.

 

Q: Hi, Secretary Yellen, I wanted to ask about the exemption for the U.S. receiving payments on Russian sovereign debt that’s due to expire next week, I’m curious how you’re thinking about the decision of whether that exemption should be renewed and what you see as the possible economic impacts of pushing Russia into default and what, what spill overs there could be from that move?

 

SEC. YELLEN: So, you know, we, when we first imposed sanctions on Russia, we created an exemption that would allow a period of time for an orderly transition to take place, and for investors to be able to sell securities. The expectation was that it was time limited. So, I think it’s reasonably likely that the license will be allowed to expire.  There has not been a final decision on that. But I think it’s unlikely that it would, you know, it would continue.

You know, in terms of Russia, Russia is not able right now to borrow in global financial markets, it has no access to capital markets. If Russia is unable to find a legal way to make these payments, and they technically default on their debt. I don’t think that really represents a significant change in Russia’s situation. They’re already cut off from global capital markets, and that would continue.

 

Q:  Madam Secretary, are you concerned that the United States, Europe, and China might end up in some kind of synchronized recession, like Ken Rogoff and other economists have predicted?

 

SEC. YELLEN: I mean, I really, I really hope that doesn’t happen. You know, from the U.S. point of view, what I would say that we have a great deal of economic momentum in the United States. We probably, we recovered faster from the pandemic economically than almost any other country. And, you know, we have a very low, almost the lowest, unemployment we’ve had in the post war period, huge job creation, a very tight labor market, and households that are in overall excellent financial shape, with substantial buffer stocks of resources that they can use to continue to spend.

We have inflation, obviously, the Fed is tightening monetary policy to address it. We are in a global environment where there are significant risks and pressures, but I really don’t expect the United States to fall into a recession. I think Europe is perhaps a bit more, a bit more vulnerable and of course more exposed on the energy front than the United States is. I’m not going to make a forecast here. But you know, this is an environment that is filled with risks, both with respect to inflation, and also potential slowdowns.

 

Thank you.

 

###

 

Agencies Announce Public Meeting on the Proposed Acquisition by The Toronto-Dominion Bank of First Horizon Corporation; Public Comment Period Extended

News Release 2022-56 | May 17, 2022

Joint Release

Board of Governors of the Federal Reserve System
Office of the Comptroller of the Currency

The Federal Reserve Board (Board) and the Office of the Comptroller of the Currency (OCC) today announced a joint public meeting on the proposal by The Toronto-Dominion Bank, Toronto, Ontario, Canada, to acquire First Horizon Corporation, Memphis, Tennessee.

The purpose of the public meeting is to collect information from a wide range of stakeholders as the agencies evaluate the proposed applications. By law, the agencies are required to evaluate:

  • the convenience and needs of the communities to be served by the combined organization;
  • the insured depository institutions’ performance under the Community Reinvestment Act;
  • competition in the relevant markets;
  • the effects of the proposal on the stability of the U.S. banking or financial system;
  • the financial and managerial resources and future prospects of the companies and banks involved in the proposal; and
  • the effectiveness of the companies and banks in combatting money laundering activities.

The public meeting will be held virtually on August 18, 2022, at 9:00 a.m. EDT. Members of the public seeking to present oral comments must register by 12:00 p.m. EDT on July 28, 2022 through the online registration web page, which will be updated with registration details by June 8, 2022. Further information and requirements to present, as well as registration information to view the public meeting, are available in the attachment from the agencies.

Also today, to give interested parties additional time to comment, the agencies announced that they are extending the public comment period for the applications to the OCC and Board that are associated with the proposal. Comments on the applications will now be accepted through August 23, 2022.

Related Link

Media Contacts

Federal Reserve Board
Adrienne Salazar
202-452-2955

OCC
Stephanie Collins
202-649-6870

Agencies Announce Public Meeting on Proposed Bank of Montreal Acquisition of BancWest Holding Inc. and Bank of the West; Public Comment Period Extended

News Release 2022-55 | May 17, 2022

Joint Release

Board of Governors of the Federal Reserve System
Office of the Comptroller of the Currency

The Federal Reserve Board (Board) and the Office of the Comptroller of the Currency (OCC) today announced a joint public meeting on the proposal by Bank of Montreal, Montreal, Canada, and BMO Harris Bank National Association, Chicago, Illinois, to acquire BancWest Holding Inc. and Bank of the West, both of San Francisco, California.

The purpose of the public meeting is to collect information from a wide range of stakeholders as the agencies evaluate the proposed applications. By law, the agencies are required to evaluate:

  • the convenience and needs of the communities to be served by the combined organization;
  • the insured depository institutions’ performance under the Community Reinvestment Act;
  • competition in the relevant markets;
  • the effects of the proposal on the stability of the U.S. banking or financial system;
  • the financial and managerial resources and future prospects of the companies and banks involved in the proposal; and
  • the effectiveness of the companies and banks in combatting money laundering activities.

The public meeting will be held virtually on July 14, 2022, at 11:00 a.m. EDT. Members of the public seeking to present oral comments must register by 12:00 p.m. EDT on June 23, 2022, through the online registration webpage. Further information and requirements to present, as well as information to register to view the public meeting, are available in the attachment from the agencies.

Also today, to give interested parties additional time to comment, the agencies announced that they are extending the public comment period for the applications to the Board and OCC that are associated with the proposal. Comments on the applications will now be accepted through July 19, 2022.

Related Link

Media Contacts

Federal Reserve Board
Adrienne Salazar
202-452-2955

OCC
Stephanie Collins
202-649-6870