Financial Regulatory Forum

G7 wants banks to pay for rescue

G7 on Ice

G7 on Ice

By Louise Egan and Gernot Heller

IQALUIT, Canada, Feb 6 (Reuters) – The idea of a global tax on banks to recapture bailout costs gained ground over the weekend, boosted by the Obama administration’s latest proposals, but there was no agreement on a specific design.

Finance ministers and central bankers from the Group of Seven rich nations called on Saturday for closer study of a UK proposal for a bank levy to cover the cost of the bailouts of 2008 and 2009 that ran to hundreds of billions of dollars.

The ministers, meeting in a remote town in Canada’s Far North, said any tax that result must be internationally coordinated and avoid choking off world economic recovery. Further details are unlikely to emerge for weeks.

The International Monetary Fund is compiling a report, due in April, on options for requiring banks to “make a fair and substantial contribution” toward bailouts. The IMF report was requested in September by the Group of 20 nations.

The G20, a more broadly based organization that is seen as supplanting the G7, will next meet in June in Toronto.

Euro zone debt woes to add urgency to Arctic G7

A summit is coming

A summit is coming

By Jan Strupczewski

IQALUIT, Canada, Feb 5 (Reuters) – Deepening woes about euro zone debt added urgency Friday to a meeting of G7 finance leaders in the Canadian Arctic that includes unique features like ministerial dog sledding and caribou dinners.

In Europe, policymakers scrambled to reassure markets about the stability of their 16-nation currency bloc as investors shed euro assets for a second day on fears about debt-laden member states like Greece and Portugal.

The sell-off comes as finance ministers and central bank governors of the euro zone’s top three economies — Germany, France and Italy — fly to meet their counterparts from the United States, Canada, Japan and Britain for the Group of Seven’s most remote and inaccessible meeting to date.

UK’s Myners calls for global debate on bank levy

LONDON, Jan 18 (Reuters) – Britain’s financial services minister Paul Myners said on Monday he wanted to promote a global debate on how to protect taxpayers from future investment bank failures and warned banks against paying big bonuses.

Myners will host a meeting of representatives from the G7, the World Bank and the IMF in London on January 25 during which an American-style insurance levy on financial institutions will be discussed in an attempt to avoid costly bailouts in the event of another crisis.

“We want to promote a global debate about this,” he told BBC radio.

“Gordon Brown made a very good speech at the G20 finance ministers’ meeting in St Andrews in November which we then followed up in the Treasury with a publication of a document setting out a number of ways in which the implicit guarantee could be internalised by the banks through a transaction tax, or through some form of deposit levy.”

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