The Group of Seven industrialized nations have agreed to push ahead with reforms in the banking sector in order to protect taxpayers from the impact of bank failures. They also indicated support to Japan's efforts to boost economic recovery at a meeting over the weekend.
Finance Ministers and Central Bank Governors of the G7 nations reaffirmed their "commitment to the faithful implementation of the G20 agenda for financial regulation," British Chancellor of Exchequer George Osborne, who chaired the meeting, said in a statement on Saturday.
"It is important to complete, swiftly, our work, to ensure that no banks are too big to fail," he said after the two-day meeting at Aylesbury, near London. "We must put regimes in place in each of our jurisdictions to deal with failing banks and to protect taxpayers, and to do so in a globally consistent manner," Osborne said.
He also stressed on the need to push ahead with measures to ensure a consistent implementation of reforms to derivatives and shadow banking.
At the meeting, Japan found support for its policies to end 15 years of deflation in the economy. As recommended by Prime Minister Shinzo Abe, the Bank of Japan introduced unprecedented monetary easing in April, which drove down the yen, benefiting Japan's export sector.
Though many countries criticized Japan's monetary policy for the weakness in yen, the G7 appeared to show increased tolerance towards the country's recovery strategy.
Japan's Finance Minister Taro Aso indicated after the meeting that the country had not been criticized for its recent actions and that the G7's understanding of Japan's policies has improved.
"We discussed the recent actions taken by our central banks, of both a conventional and unconventional nature, and the role monetary policy can play to support the recovery while maintaining price stability," Osborne said.
"We reaffirmed our commitment we made in February that our fiscal and monetary policies have been, and will remain, orientated towards meeting our respective domestic objectives using domestic instruments, and that we will not target exchange rates," he said.
The G7 also agreed on the need for structural reforms to boost competitiveness and growth, including new trade agreements and measures to raise employment, Osborne added.
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