Merkel says G20 needs to act on big banks’ influence

January 20, 2010

BERLIN, Jan 20 (Reuters) – The Group of 20 economic powers needs to develop a set of rules to prevent banks becoming so big that they can hold governments to ransom, German Chancellor Angela Merkel said on Wednesday.

“This year is about implementing the regulations that have been agreed during the G20 process,” Merkel told parliament during a budget debate.

“It is also about finding further regulations, and that applies especially for the G20 meetings … to find ways to prevent banks becoming so big or so complex that they can hold us to ransom again,” she added.

“There are different models and Germany will go into the debate with one such model,” she said.

Canada will host a G20 summit in June.

German Finance Minister Wolfgang Schaeuble said on Tuesday he saw growing signs of achieving a possible international agreement on measures to tackle the banking sector.

Germany has said it is not planning a special charge for banks after U.S. President Barack Obama proposed a fee for Wall Street banks to reimburse taxpayers for bailing them out.

Instead, Merkel has said she could imagine an international financial transaction tax.

Merkel told parliament it was also important that exit strategies from economic stimulus measures were agreed internationally. (Reporting by Paul Carrel and Madeline Chambers; editing by Patrick Graham) ((; +49 30 2888 5210; Reuters Messaging:

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