China’s central bank said a meeting in Shanghai produced an agreement with the U.S. Treasury to appoint contact people to deal with any future “financial stress events,” a rare example of the world’s two biggest economies seeking common ground.
The two sides also “exchanged lists of financial stability contacts” during the fifth meeting of the so-called Financial Working Group that was set up following Treasury Secretary Janet Yellen’s visit to China last year.
“The People’s Bank of China and the U.S. Treasury Department signed an exchange of notes on strengthening China-U.S. financial stability cooperation,” according to the readout from the PBOC about the meetings on Aug. 15-16.
The Treasury said in its own readout Monday that the two sides exchanged letters “in support of coordination during times of financial stress to strengthen appropriate information sharing and reduce overall uncertainty between Treasury and the PBOC regarding crisis management and recovery and resolution frameworks.” The exchange of key points of contact is to make it easier to quickly coordinate in instances of financial stress or operational resilience issues, the readout said.
“U.S. officials also raised areas of disagreement during the conversations,” the U.S. readout said, without detailing what those were.
The talks represented the first sit-down between senior U.S. and Chinese economic officials since Beijing’s leadership laid out its longer-term priorities last month at a twice-a-decade conclave.
The meetings in Shanghai planned to focus on topics including macroeconomic and financial stability, governance of the International Monetary Fund and capital markets issues, according to a Treasury spokesperson commenting before the meeting.
The agreements will “enable the financial management departments of both sides to maintain timely and smooth communication channels and reduce uncertainty when financial stress events and financial institutions’ operational risks occur,” China’s readout said.
For the first time, financial institutions participated in the meetings, according to the PBOC readout, which didn’t name the companies. Discussions covered sustainable finance and areas of possible cooperation, it said.
With assistance from Viktoria Dendrinou.
