Britain to host meeting of G-7 finance officials on Jan. 25

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Britain to host January G-7 meeting

LONDON — Britain will host a meeting of finance officials from the Group of Seven nations on Jan. 25 to discuss measures to protect the public from future bank failures, including a proposed global insurance levy, the Treasury said on Monday.

The meeting of senior G-7 civil servants, representatives from the International Monetary Fund and the Financial Stability Board, will feed into an IMF report due out in April, a Treasury spokesman said on customary condition of anonymity.

The officials will also discuss the use of contingent capital, the holding of debt instruments by banks that could be converted quickly into equity in times of stress.

Britain’s Financial Services Minister Paul Myners, who will host the meeting, said he wanted to promote a global debate about a U.S. style insurance levy as part of a wider dicussion about protecting taxpayers.

“We are looking at a very broad range of principles because these are areas where we have to work as part of an international co-ordinated response,” Myners told BBC radio. “Because we do not want to disadvantage the U.K. in an industry — banking and financial services — in which we have global leadership.”

The meeting follows British Prime Minister Gordon Brown’s call at November’s meeting of finance ministers from the Group of 20 rich and developing countries for consideration of a number of measures to protect taxpayers.

Brown also raised the idea of a tax on financial transactions, but that is not on the table for the London meeting of finance officials.

The push for a global insurance levy has been gathering steam since U.S. President Barack Obama announced plans last week to tax U.S. banks to recoup the public bailout of foundering firms at the height of the financial crisis.

Obama is proposing a tax of 0.15 percent on the liabilities of large financial institutions. It would apply only to those companies with assets of more than $50 billion — a group estimated at about 50.

British Treasury chief Alistair Darling, who introduced a one-off tax on bankers’ bonuses this year, said over the weekend that Britain is not considering a U.S.-style levy.

But Britain’s Conservative Party, which is currently ahead in opinion polls for a general election that must be held by June, has said it would back a global levy if it was agreed by G-20 nations.

The London meeting of finance officials comes just ahead of a scheduled gathering of G-7 finance ministers in Iqaluit, Canada, on Feb. 5 and 6.

Canadian Finance Minister Jim Flaherty has said the Iqaluit meeting will focus on financial industry reforms, strengthening international institutions and promoting a sustainable global recovery.

Canada holds the rotating presidency of the group, rounded out by the United States, France, Germany, Italy and Japan, this year. It has chosen Iqaluit, the provincial capital of the Canadian territory of Nunavut, to showcase the country’s Arctic northern region.