A Good Contribution at Banff amid Global Uncertainty
John Kirton, G7 Research Group
May 25, 2025
The G7 finance ministers and central bank governors produced a productive performance at their meeting in Banff, Canada, on May 20–22, 2025.
They attracted all the members, including US treasury secretary Scott Bessent and invited guests from Ukraine and several multilateral finance institutions. All G7 members participated through the entire meetings, and did so in highly engaged, helpful and cooperative ways.
They produced a fully consensual communiqué and annex across a comprehensive array of subjects, from the financial, economic, energy, security and technological domains. The combined document contained 62 precise, future-oriented, politically obligations commitments (see Appendix A). They were led, in the main communiqué, by those on regional security for Ukraine and on macroeconomic policy with seven each, financial regulation with six, development four, trade three and the digital economy’s artificial intelligence withy one. Financial crime had 35, largely in the annex.
The seven commitments supporting Ukraine were the strongest. Here members reaffirmed their “unwavering support” for Ukraine’s territorial integrity, right to exists, freedom, sovereignty and independence, threatened to explore options for “further ramping up sanctions” should Russian president Vladimir Putin not agree to a ceasefire, keep Russian sovereign assets frozen until Russia ended its “aggression” and “pays for the damage it has caused to Ukraine.” That damage was estimated to cost $35 billion. Assuming that Ukraine would soon win the war, they promised to “promote the early recovery and reconstruction of Ukraine” including at the Ukraine Recovery Conference in Rome on July 10–11, 2025. In a new measure, pushed by Bessent, they promised that “no countries or entities, or entities from those countries that financed or supplied the Russian war machine will be eligible to profit from Ukraine’s reconstruction.”
Together these commitments offered strong, new support and sanctions for Ukraine. They came immediately after US president Donald Trump had just tilted back to his familiar stance of giving Putin the benefit of the doubt and implicit permission to continue attacking Ukraine.
On macroeconomic policy, the seven commitments were quite general and reaffirmed previous commitments, but also promised to consult closely together for a macroeconomic mix that also promotes economic security and resilience and that “ensures that all our citizens can benefit from that growth.
The latter objective on economic security appeared just as the US House of Representatives passed a tax bill that would, if the Senate agreed, cut the benefits for the poorest Americans and the taxes for the richest ones.
Far more puzzling was the communiqué’s statement that “economic policy uncertainty has declined from its peak.” This came seven days after Moody’s cut the US credit rating from the top-tier triple A level it has enjoyed for over a century, since 1917. This announcement caused a spike in the interest rates the US government had to pay on its soaring annual fiscal deficit and accumulated debt of about $36 trillion and that US citizens would have to pay on the mortgages on their homes, and businesses on the money they needed to borrow to invest or survive. As no one could know how far these interest rates would rise, and what the US Federal Reserve and Congress would do in response, economic policy uncertainty had cleared risen, with an added boost from Trump’s erratically rising tariffs on his partners in the G7 and beyond.
Trade policy was included under the umbrella of “Economic Resilience and Security,” which contained three commitments. Members readily agreed, as Bessent wished, to monitor and assess non-market policies and practices, doing so “as guided by Leaders.” They shifted the focus of Trump’s tariff war from inside the G7 to outside countries, implicitly China, by promising to address the risks of G7 “low-value importation systems,” which could bring illegal, deadly drugs such as opioids and fentanyl into their countries. They also agreed to work on market concentration and international supply chain resilience, thus further shifting the focus from what Trump said was the cause of his tariff war. While there was no announcement of any truce or tempering of those tariffs against G7 members, there was no hint they would increase. Such silence was thus a de facto truce.
However, it was soon shattered when, the next day, Trump tweeted that he would impose, in one week, a new 50% tariff on imports from the European Union into the US, unless the EU did what he wanted. While it was a threat, not an action, and Bessent said it was intended to increase the pace of the US-EU negotiations, Trump quickly added that he was not looking for a deal. Economic policy uncertainty soared again.
The remaining commitments covered many economic subjects that highlighted the breadth and strength of G7 consensus. The one consensus on artificial intelligence addressed both its rewards and risks for the financial sector. The five commitments on financial regulation included one supporting the G20 and one addressing cyber threats. The four commitments on “Support for Developing Countries” – a subject far from Trump’s priorities – explicitly supported, inter alia, clean energy products, critical mineral supply chains, debt data, Africa, Latin America and the Caribbean, and, once again, supporting the G20.
On financial crime, the 35 commitments, contained again those focused on the security subjects of money laundering, terrorist finance, and financing the proliferation of weapons of mass destruction. They added with more detail and determination those on tax and sanctions evasion, virtual assets, cybersecurity, emerging technologies including AI, virtual assets, stablecoins, decentralized finance, and cross-border payment systems and remittances. Here they also affirmed the G7’s distinctive foundation mission to protect at home and promote abroad human rights.
In their core communiqué, the finance ministers and central bank governors identified the threats to all economic from health and natural disasters, and the importance of supporting vulnerable countries with tools, “including Climate Resilient Debt Clauses and Insurance.” The finance communiqué’s use of the word “climate” was a further advance from the G7 foreign ministers’ communiqué at Charlevoix, which referred to “extreme weather events,” for a G7 whose most powerful leader denied the existence of climate change.
Together, the Banff G7’s finance ministers and central bank governors laid a firm foundation for their leaders’ work three and a half weeks later, including on security and safety at home and abroad, energy security, critical minerals, the digital transition and AI, climate disasters, debt relief, and, above all, support for Ukraine.
Appendix A: G7 Finance Ministers and Central Bank Governors Commitments, May 22, 2025 ↩
Issue
Number
Percentage
Crime and corruption
35
56%
Regional security – Ukraine
7
11%
Macroeconomics
7
11%
Financial regulation
5
8%
Development
4
6%
Trade
3
5%
Digital economy and artificial intelligence
1
2%
Total
62
100%
Identified and coded by Brittaney Warren, May 23, 2025
Global Economy (macroeconomics)
In the face of multiple complex global challenges, we are committed to pursuing our shared policy objectives.
We acknowledge that economic policy uncertainty has declined from its peak, and we will work together to achieve further progress.
We continue to engage with each other and with international partners to advance international cooperation and deliver prosperity.
We are committed to working together to achieve a balanced and growth-oriented macroeconomic policy mix that supports our economic security and resilience and ensures that all of our citizens can benefit from that growth.
We are committed to maintaining well-functioning financial markets.
We will continue to monitor and consult closely on these matters.
We reaffirm our May 2017 exchange rate commitments.
Economic Resilience and Security (trade)
Building on our previous commitments and as guided by Leaders, we will contribute, as appropriate, to the monitoring of NMPPs, continuing to assess the distortions they cause in markets and their global spillovers.
[We agree that joint analysis of market concentration and international supply chain resilience would be useful areas of future work. This analysis will inform our respective policy approaches, which will in part be shaped by our underlying industrial and consumer structures.] Where appropriate and relevant, we will engage partners beyond the G7.
We commit to exploring ways that our low-value importation systems could address these risks.
Support for Ukraine (regional security – Ukraine)
The G7 remains committed to unwavering support for Ukraine in defending its territorial integrity and right to exist, and its freedom, sovereignty and independence toward a just and durable peace.
If such a ceasefire is not agreed, we will continue to explore all possible options, including options to maximize pressure such as further ramping up sanctions.
We reaffirm that, consistent with our respective legal systems, Russia’s sovereign assets in our jurisdictions will remain immobilized until Russia ends its aggression and pays for the damage it has caused to Ukraine.
We collectively commit to help build investor confidence through bilateral and multilateral initiatives.
To this end, in addition to the ongoing support through the MIGA SURE (Support for Ukraine’s Reconstruction and Economy) trust fund, we will work, including through the Ukraine Donor Platform, with the Government of Ukraine, international financial institutions (IFIs), and the insurance industry towards removing the blanket ban imposed on Ukraine as soon as possible.
We will continue to coordinate support to promote the early recovery and reconstruction of Ukraine, including at the Ukraine Recovery Conference, which will take place in Rome on July 10-11, 2025.
Further, we agree to work together with Ukraine to ensure that no countries or entities, or entities from those countries that financed or supplied the Russian war machine will be eligible to profit from Ukraine’s reconstruction.
We recognized the [benefits of AI for the financial sector and the] need to monitor and assess potential risks to financial stability as AI adoption further increases.
Financial Sector Issues (financial regulation)
We are committed to a strong, resilient and stable financial sector.
We reiterate that a continued focus on financial stability and regulatory issues remains vital to ensure the effective functioning of the financial system.
We agree on the need to assess non-bank data availability, use and quality and to share knowledge and approaches to monitoring and assessing potential risks.
We remain committed to delivering cheaper, faster, more transparent and more accessible cross-border payments while maintaining their safety, resilience, and financial integrity. [This includes supporting the implementation of the G20 Roadmap as well as appropriate future actions as necessary to meet these goals.]
To address the evolving cyber threat landscape, we will continue to take action to further strengthen our shared response capabilities and protocols in the event of a significant cyber incident.
Financial Crime Call to Action (crime and corruption)
We remain steadfast in our commitment to tackling financial crime, including money laundering
We remain steadfast in our commitment to tackling financial crime including…terrorist financing
We remain steadfast in our commitment to tackling financial crime including…the financing of proliferation of weapons of mass destruction (AML/CFT/CPF).
We endorse a “Financial Crime Call to Action” to spur further progress and collective efforts of the Financial Action Task Force (FATF) and its Global Network.
Support for Developing Countries (development)
We reaffirm our commitment to the ongoing implementation of the World Bank-led Resilient and Inclusive Supply-Chain Enhancement (RISE) Partnership [and recognize its progress toward better integrating low- and middle-income countries in the global supply chain of clean energy products, especially in Africa.]
We support the expansion of RISE’s activities to Latin America and the Caribbean, and a better integration of all segments of the critical mineral supply chain.
We recognize the need for continued efforts with all partners, public and private, to enhance the availability and quality of debt data, including through the Data Sharing Exercise with the World Bank.
We reaffirm our commitment to achieving more effective and impactful MDBs through reforms aiming to ensure that they work effectively as a system to address the most pressing global challenges, deliver on their core mandate, and use their resources as efficiently as possible, including by implementing the recommendations from the G20 Capital Adequacy Framework Review.
G7 Financial Crime Call to Action (crime and corruption)
The G7 Finance Ministers and Central Bank Governors remain steadfast in our commitment to tackling financial crime, including money laundering
The G7 Finance Ministers and Central Bank Governors remain steadfast in our commitment to tackling financial crime, including …terrorist financing
The G7 Finance Ministers and Central Bank Governors remain steadfast in our commitment to tackling financial crime, including … the financing of proliferation of weapons of mass destruction (AML/CFT/CPF).
The Way Forward (crime and corruption)
Today, we endorse the present Financial Crime Call to Action to strengthen global security, protect financial sector integrity, and foster economic growth and economic development.
Strengthening our Frameworks (crime and corruption)
We [re-commit to the founding principles of the FATF and] will continue to actively support the organization.
[The FATF is the ultimate AML/CFT/CPF standard setter that catalyzes improvements in members’ AML/CFT/CPF regimes.] It is essential to maintain the FATF’s role at the centre of the global fight against illicit finance.
We commit to ensuring that the FATF remains a technical body that produces in-depth and impartial peer reviews and research that inform our ongoing understanding of risk.
We commit to improving the effectiveness of our respective AML/CFT/CPF regimes.
The G7 will continue to improve our effectiveness in preventing the proceeds of crime from entering our financial sectors
The G7 will continue to improve our effectiveness in … detecting and disrupting money laundering threats
The G7 will continue to improve our effectiveness in … sanctioning criminals and depriving them of their illegitimate proceeds in a manner consistent with our domestic legal frameworks.
[Shell companies are enablers for criminals to hide proceeds of crime and engage in illicit activities, such as large-scale tax and sanctions evasion.] Ensuring that competent authorities, particularly law enforcement, have sufficient resources and tools to investigate and prosecute money laundering, terrorist financing, and proliferation financing involving shell companies is critical to fighting financial crime.
We commit to enhancing implementation of our targeted financial sanctions and ensuring they are the most effective in the world.
Enhancing International Cooperation (crime and corruption)
We will stay abreast of emerging risks tied to money laundering, terrorist financing and proliferation financing through research and the development of joint typologies and strategic intelligence.
We will further research and exchange information such as typology work on emerging risks related to virtual assets, including from the perspectives of cybersecurity and AML/CFT/CPF, and take necessary measures. [DPRK]
Therefore, we commit to work together to maintain an up-to-date and common understanding of relevant threats, vulnerabilities, and typologies to prevent and combat complex proliferation financing and sanctions evasion schemes.
We must break down silos and deepen the responsible exchange of information internationally to make it harder for criminals to access the financial system and evade detection.
[Bad actors are exploiting silos within, and across, AML/CFT/CPF regimes to conceal their actions.] In response, we will improve risk-based and secure information sharing internationally between our national competent authorities, and domestically amongst the private sector and between public and private sector partners, consistent with our domestic legal frameworks.
[Many of our financial institutions operate across G7 markets.] We will encourage deeper cooperation between our regulators who supervise on a group-wide basis.
We commit to ensuring that our AML/CFT/CPF supervision is risk-based, effective and focused on stopping financial crime.
We will also ensure that sanctions for non-compliance are proportionate, dissuasive and effective.
Addressing Financial Crime as a Barrier to Growth and Stability (crime and corruption)
We will support efforts to strengthen AML/CFT/CPF frameworks in lower capacity countries to foster growth and economic development. [This can be achieved through many channels, including bilateral and multilateral assistance and collaboration.]
We reiterate our commitment to supporting the FSRBs in overseeing the consistent and effective implementation of the FATF standards worldwide, including in the next round of mutual evaluations.
We commit to supporting the effective implementation of AML/CFT/CPF measures that are risk-based and proportionate.
By implementing the revised FATF standards, we will facilitate legitimate funds continuing to move through the formal financial sector, promoting economic development and financial inclusion while mitigating unintended consequences.
We commit to exploring the role of technology in AML/CFT/CPF implementation.
We encourage adoption of new technologies that can more effectively detect, report and interdict illicit finance. [This includes partnering with the private sector to understand how emerging technologies (including artificial intelligence) can be used to improve the efficiency and effectiveness of AML/CFT/CPF regimes. This should be consistent with our respective domestic legal frameworks and risk-based, while ensuring data protection and human rights.]
We continue to support the FATF’s initiatives to accelerate global implementation of its standards on virtual assets and virtual asset service providers (VASPs) as well as its work on emerging risks, including those that arise from misuse of stablecoins and peer-to-peer transactions, offshore VASPs, and decentralized finance (DeFi) arrangements.
We are contributing to the FATF’s ongoing work to strengthen its Standards on Payment Transparency to adapt to changes in payment business models and messaging standards and to foster payment systems that are more transparent, inclusive, accessible, safe and secure, while enabling faster and cheaper transactions, including remittances.
Consistent with this work, we also support the G20 Roadmap for Enhancing Cross-border Payments.
Lastly, we commit to furthering this work under the French G7 Presidency in 2026, in coordination with all FATF members, and to report on the actions taken to implement the commitments in this Call to Action.
