WASHINGTON (AP) — World finance officials on Friday promised to cooperate more closely and utilize all their policy tools to bolster an anemic global recovery that is now being threatened by an anti-trade backlash in the United States and renewed market unease about Britain's planned exit from the European Union.
Officials of the Group of 20 major economic powers acknowledged a broad range of new risks ranging from Donald Trump's vows to impose penalty tariffs to punish China and other countries he believes are pursuing unfair trading practices to extensive worries over whether Britain's planned exit from the EU could further drag down an already weak global recovery.
Chinese Finance Minister Lou Jiwei, the current chairman of the G-20 finance group, said finance officials realized the global situation "remains challenging and complicated" with growth in many nations still too slow despite years of aggressive monetary policies by the Federal Reserve and other central banks.
"Uncertainties and risks facing the world economy have increased," Lou told reporters. "Geopolitical tensions are growing, terrorist attacks are frequent ... all of these factors have major implications on the international economic and financial markets."
The G-20 discussions, which began with a working dinner Thursday night, included finance ministers and central bank governors from traditional economic powers such as the United States, Germany and Japan and emerging economies such as China, Brazil and India. Treasury Secretary Jacob Lew and Federal Reserve Chair Janet Yellen represented the United States.
Lew told reporters after the G-20 discussions that he was encouraged that there was growing support among other nations that more tools needed to be employed beyond monetary policy to boost weak global growth, a position the Obama administration has taken for a number of years.
"From China to Canada ... we are seeing more willingness," Lew said. "I continued to press for all tools to sustain growth."
The concerns about financial markets were highlighted earlier Friday when the British pound plunged sharply, sliding 6 percent in just a couple of minutes to its lowest level in more than three decades, before rebounding.
British Treasury chief Philip Hammond, in Washington for the finance meetings, said the plunge was the result of a growing realization of investors that Britain is proceedings with plans to leave the EU, a process that has been dubbed Brexit.
He told reporters that some market players may have been slow to catch up to Britain's vote in June to leave the EU. "It seems that what's happened this week is that another bunch of them said 'hang on a minute, the UK is leaving the European Union,' " Hammond said.
Markets have also been roiled in recent days by worries about the health of Germany's largest bank, Deutsche Bank.
German Finance Minister Wolfgang Schaeuble refused to address questions about Deutsche Bank's future, but he noted that global financial markets rebounded this summer after initially falling sharply following the June vote by Britain to leave the EU. He credited the market resilience to the financial reforms put in place following the 2008 financial crisis.
"The experience and results of Brexit have shown that we have already made the globe more resilient," Schaeuble said. "But that is not an occasion to slacken but to continue our efforts." Germany will lead the G-20 next year and Schaeuble said that continued implementation of banking reforms would be on the agenda.
Lew also refused to discuss Deutsche Bank specifically, but he said with regard to all Europeans banks, U.S. officials have made the point for some time that it was important for financial institutions to have adequate capital buffers. "We have been clear that Europe has not done as much as the U.S. and sometimes doing more is better," Lew said.
The G-20 discussions came in advance of the annual meetings of the 189-nation International Monetary Fund and its sister lending organization, the World Bank. The finance discussions were scheduled to conclude on Saturday.
In her opening speech to the delegates, IMF Managing Director Christine Lagarde said it would be a mistake to roll back decades-long efforts to lower trade barriers but more must be done to help those have been hurt by freer trade.
"During major economic transitions, some get left behind, and many suffer," she told the opening session of the annual meetings. "History tells us that education and social safety nets must be retooled to support and enable people to adjust to a fast-changing world."
World Bank President Jim Yong Kim, who was re-appointed last week for a second five-year term at the bank, said he believed a major concern that needed to be addressed was the steep slowdown in trade growth that has occurred this year as the price of many commodities that poor nations export has fallen sharply.
Attacks on globalization have risen in prominence with Trump's presidential campaign. Trump has made illegal immigrants and America's huge trade deficits central tenets of his campaign.
The IMF's updated economic outlook downgraded its estimate for U.S. economic growth in 2016 to 1.6 percent, from the 2.2 percent it had predicted in July, reflecting the extremely weak start to the year. The U.S. economy grew at an annual rate of 2.6 percent in 2015. The IMF is projecting overall global growth this year at a lackluster 3.1 percent.