WASHINGTON Finance ministers from the world's top economies debated global economic risks and the potential impact that ultra-loose monetary policies have on banks' profits, a senior Japanese finance ministry official said on Thursday.
The G20 gathering in Washington did not discuss currency moves, the impact of Britain's decision to leave the European Union or the financial state of Deutsche Bank, said Masatsugu Asakawa, Japan's vice finance minister for international affairs.
"The impact of Brexit (on the global economy) must be watched from a medium- to long-term perspective," he told reporters, when asked about the sterling's recent plunge.
Weak global trade and the need for bolder steps to boost investment featured high at Thursday's G20 working dinner, with some finance leaders voicing concern that growing protectionist sentiment may be hurting trade, Asakawa said.
"The general understanding was that the global economy continues to grow moderately but there are various risks, including political ones," he said.
Asakawa attended the G20 dinner on behalf of Finance Minister Taro Aso, who was needed in parliament at home to discuss the budget. No communique was issued after the meeting.
Worries about the health of Europe's banking sector, persistently low global growth and market volatility caused by Brexit overshadowed the G20 gathering, held on the sidelines of the International Monetary Fund and World Bank meetings.
The sterling hit three-decade lows in thin Asian trade on Friday on anxiety about a messy exit by Britain from the European Union.
Deutsche Bank's financial troubles added to the gloom. The IMF urged Germany's biggest lender to reform its business model and identified it as a bigger potential risk to the financial system than any other global bank.
The IMF has also urged countries to fix their over-reliance on ultra-loose monetary policy by making more use of fiscal and structural policies to boost their economies.
The G20 finance leaders discussed the pros and cons of the ultra-loose monetary policies undertaken by advanced economies, with some pointing to the damage very low borrowing costs could inflict on bank profits, Asakawa said.
But there was some debate on whether ultra-easy monetary policy alone were to be blamed for low bank profits, he added.
(Reporting by Leika Kihara; Editing by Chang-Ran Kim and Kim Coghill)