G7 to press on with bank reforms, gives Japan free pass

Group of Seven finance officials yesterday agreed to press on with measures to deal with failing banks and gave a green light to Japan’s efforts to galvanise its economy.

British Chancellor George Osborne said the finance ministers and central bankers meeting outside London focused on unfinished banking reforms. The emergency rescue of Cyprus in March acted as a reminder of the need to finish an overhaul of the banking sector, five years after the world financial crisis began.

“It is important to complete swiftly our work to ensure that no banks are too big to fail,” Osborne told reporters after hosting a two-day meeting in a stately home 40 miles outside London.

“We must put regimes in place... to deal with failing banks and to protect taxpayers and to do so in a globally consistent manner,” he said.

Germany has previously come under pressure to give more support to a banking union in the eurozone. The plan could help strengthen the single currency area, but Berlin worries it may pay too much for future bank bailouts if it signs up to a scheme to wind up failing banks.

As at previous international meetings, Japan escaped any censure for printing money on a scale that has pushed the yen sharply lower.

Osborne said the G7 – the US, Germany, Japan, Britain, Italy, France and Canada – reaffirmed that fiscal and monetary policy should be aimed at domestic concerns, not currency manipulation.