More work is needed to overcome weaknesses exposed by the pandemic: Yellen

By Andrea Shalal and David Lawder

WASHINGTON, Apr 6 (Reuters) – US Treasury Secretary Janet Yellen said her country’s rapid recovery from the COVID-19 crisis will contribute to global growth, but more efforts are needed to overcome the vulnerabilities exposed in the non-bank financial sector, global supply chains and the social safety net.

In a forum with the leaders of the International Monetary Fund and the World Bank, Yellen said that the administration of President Joe Biden had decided to “go big” in its response to COVID-19, in order to avoid the negative impact of unemployment.

Yellen said the US economy is now expected to return to full employment next year.

But he added that the crisis struck a heavy blow across the world and that it is the responsibility of rich economies to ensure that years of progress in reducing poverty are not entirely erased by the pandemic.

“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 sake of growth of the entire global economy. “

Yellen said she expected global finance officials to advance approval of a new allocation of the IMF’s emergency reserves, or Special Drawing Rights, during the meeting, saying it was critical to address global debt problems exacerbated by the crisis.

He also highlighted the commitment of the Joe Biden government to address climate change at the local level and ensure the necessary “transfer of resources” to enable similar actions in developing countries.

“We need to ensure that we help developing countries achieve their climate goals alongside their development goals. And the availability of green finance is critical to that,” he said, adding that addressing climate change would also provide investment opportunities for the sector. private.

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The official said it was critical to ensure that the world was better prepared for the next global health crisis and mentioned the need to improve the resilience of supply chains and social safety nets around the world.

Yellen said the core banking sector had strengthened after the 2008-2009 financial crisis, but some areas of the non-bank financial sector “showed tremendous stress” during the pandemic and would require attention.

(Reports and Andrea Shalal and David Lawder. Edited in Spanish by Marion Giraldo and Manuel Farías)