G7 finance chiefs to discuss bank reform push
By William Schomberg
LONDON (Reuters) - Some of the world's most powerful finance chiefs will meet in an English stately home on Friday and Saturday to try to speed up banking and finance reforms, with Cyprus' near meltdown fresh in their minds.
Finance ministers and central bank governors from the Group of Seven industrialized economies probably will not break new ground on how to fix the weak world economy as discussions at the International Monetary Fund took place just three weeks ago.
Officials from two of the G7 economies said the talks - on Friday and Saturday at a 17th-century country house 40 miles northwest of London - were likely to focus more on the slow progress of reforms to banking and finance around the world.
"It's very rare for a G7 to focus on financial regulation," one of the officials said, speaking on condition of anonymity.
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 financial crisis began.
"It makes sense for the G7 financial leaders to send out a message, from high up, that global efforts to ensure financial stability via appropriate regulation must continue," the official said.
Germany may come under renewed pressure to give more support to a banking union in the euro zone as it did at the recent IMF/G20 meeting in Washington. The idea was proposed last year to help strengthen the single currency area but Berlin worries it may foot the bill for future bank bailouts.
While the first step - to create a single bank supervisor under the European Central Bank - looks set to be in place by mid-2014, a second pillar, a 'resolution' agency and fund to close failed banks, is in doubt. And there is little prospect that a third leg, a single deposit guarantee scheme, will ever see the light of day. Continued...