By reaffirming this principle, advanced economies could set the stage for a broader accord among all systemically important economies. Last week’s concerted intervention by the G-7 provides an example of these principles in action. The circumstances were clearly exceptional: movements in the yen had become disorderly, volatility was excessive, and there were potential adverse implications for economic and financial stability.
To address these problems and in response to a request of the Japanese authorities, the G-7 acted in concert in foreign exchange markets for the first time since 2000.