Yellen says more work is needed to shore up weaknesses revealed by pandemic By Reuters

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© Reuters. FILE PHOTO: U.S. Treasury Secretary Yellen attends an economic briefing at the White House in Washington

By Andrea Shalal and David Lawder WASHINGTON (Reuters) – US Treasury Secretary Janet Yellen said a rapid US economic recovery would boost overall global growth, but more work was needed to shore up the Weaknesses from the global COVID-19 crisis exposed in the non-bank financial sector. sector, supply chains and social safety nets. Yellen told IMF and World Bank leaders on Tuesday that the Biden Administration had decided to “go big” with its COVID-19 response to avoid the negative “healing” impact of long-term unemployment, adding that it hoped that the US economy would return to full employment next year. Speaking during the spring meetings of the International Monetary Fund and the World Bank, the former chairman of the Federal Reserve said that the crisis had dealt a major blow around the world and that it was the responsibility of advanced economies to ensure that years of progress in poverty reduction were not reversed by the crisis. . “We are going to be careful to learn the lessons from the (global) financial crisis, which is: ‘Don’t withdraw support too quickly,'” Yellen said, “And we would encourage all developed countries that have the capacity.” … to continue supporting a global recovery for the growth of the entire global economy. “The IMF said Tuesday that unprecedented public spending to combat the COVID-19 pandemic, primarily by the United States, would boost global growth. at 6% this year, a rate not seen since the 1970s. Yellen said she expected global finance officials to move forward in approving a new allocation from the IMF’s emergency reserve, or Special Drawing Rights, during the meeting, and said addressing global debt problems exacerbated by the crisis was critical. Ensuring the world is better prepared for the next global health crisis is critical, he said, citing the need to improve the resilience of supply chains. and social safety nets around the world. He said that the central banking sector had strengthened after the financial crisis of 2008-2009, but some areas of he non-bank financial sector “showed tremendous stress” during the pandemic and would require attention. CLIMATE FRONT AND CENTER Yellen, who met Tuesday with the Coalition of Finance Ministers for Climate Action, also underscored the Biden Administration’s commitment to addressing climate change at home and ensuring the necessary “transfer of resources” to enable action. similar in developing countries. “We need to ensure that we help developing countries meet their climate goals alongside their development goals. And the availability of green finance is critical to that,” he said, noting that addressing climate change would also provide investment opportunities for the private sector. sector. IMF Managing Director Kristalina Georgieva said climate risks were a growing threat to economic and financial stability, and said the IMF was stepping up its efforts to standardize risk reporting, conduct stress tests and analyze the role of supervisory authorities. The Fund was also integrating climate-related risks into its financial sector assessments, while working with other organizations to augment data on carbon intensity and other climate risks in quarterly macroeconomic reports. It was also working with countries to help them accelerate their ability to integrate climate into their macroeconomic policies, he said. World Bank President David Malpass said the bank was finalizing a new climate change action plan that includes a large increase in spending, building on record climate finance over the past two years.