G7 finance ministers meeting

CNC report from London
Added On May 12, 2013

Finance ministers and central bank governors from the Group of Seven top economies are holding a two-day meeting in Aylesbury, northwest of London.

They are discussing the world economic recovery, banking reform and monetary policy, but no communique is expected after the meeting.

British Finance Minister George Osborne chaired the meeting.

He suggested three priorities for discussions of finance ministers and central bank governors of the G7, namely Canada, Germany, the United States, France, Japan, Britain and Italy.
  
Osborne listed the tree priorities as monetary activism, fiscal responsibility, and structural reform.

He agreed that the G20, which includes both the advanced and emerging economies, is rightly the primary economic forum for setting the global rules of the game.
  
However, the G7 still represents around half of the world's economy and constitutes major economic firepower.
  
In recent years, the G7 countries tend to get together on the sidelines of the G20 and the International Monetary Fund (IMF) meetings.
  
Osborne said the G7 is an opportunity to consider what more monetary activism can do to support the recovery, while ensuring medium-term inflation expectations remain anchored.

Up to now, the Federal Reserve, the Bank of England, and the Bank of Japan have all undertaken Quantitative Easing (QE), and the Bank of Japan recently announced it would double its QE program.

The dollar breached the 100 yen mark late Thursday for the first time in a little over four years.

Over the past few months, the yen has dropped sharply as the new government in Japan tries to bring an end to the country's two-decade stagnation, primarily by flooding the economy with money.  
  
The country's central bank has been pumping money in the hope of stoking inflation as the country has seen prices fall for much of the last 20 years.

As a consequence, the yen has been sold heavily.

U.S. Treasury Secretary Jack Lew sent his warning for Japan's money injection.

He said Japan had "growth issues" that needed to be dealt with, but its attempts to stimulate its economy needed to stay within the bounds of international agreements to avoid competitive devaluations.

Lew told the CNBC business news channel that he would keep an eye on that.

However, Tokyo insisted its tumbling yen was not a hot topic at the meeting of finance chiefs, despite rhetoric about a global currency war.

After hours of talks with fellow G7 ministers and central banks, Japanese Finance Minister Taro Aso told reporters that Japan's stance is gaining broader understanding.

The G7 is building on last month's wider Group of 20 meeting, while looking ahead to next month's G8 heads of state summit in Northern Ireland.
  
Britain is this year president of the G8 -- or G7 plus Russia -- and is using the platform to also push for greater multilateral co-operation in tackling tax evasion.