UPDATE 1-Canada says G20 enthusiasm for bank tax is limited

* New capital standards take priority over bank levy

* Sees signs of global imbalances re-emerging

* China forex reform not the only change needed

* Canada outlines priorities for June G20 summit

OTTAWA, April 20 (BestGrowthStock) – Canada does not expect
universal enthusiasm for the idea of a bank levy among G20
finance officials at a meeting in Washington this week, a
senior finance official said on Tuesday.

Canada opposes a global bank levy, first proposed by
Britain as a way of ensuring that banks and not taxpayers pay
for bailouts. But the idea is gaining traction in the United
States and Europe and a report by the International Monetary
Fund recommended taxes be imposed on banks.

The official told reporters in a briefing that the Group of
20 leading developed and developing nations must first follow
through on a commitment to toughen capital standards for banks,
a plan that is at risk of getting crowded out by new ideas like
a bank levy.

G20 finance ministers and central bank governors will meet
on Friday to discuss financial regulatory reform. They will
also work on a plan to avoid a return to global current account
imbalances that contributed to the recent financial crisis.

The Canadian official on Tuesday said much work was still
needed to fulfill the G20’s commitment to improve bank capital
rules by year-end.

The official also expressed concern about signs that global
imbalances were returning after shrinking during the global
economic crisis.

That adds urgency to the G20’s so-called framework for
global, sustainable and balanced growth. That framework opposes
mutual assessments among G20 members of their policies to
ensure, among other things, that China relies less on exports
for growth and the United States cuts its deficit.

It is in China’s own best interest to allow its yuan to
strengthen, the official said, but that alone will not solve
global imbalances.

Canada and China will hold a bilateral meeting on the
sidelines of the Washington meeting.

Finance Minister Jim Flaherty will tell his G20 colleagues
that Canada’s priorities for the June G20 summit in Toronto are
the framework for ensuring balanced growth, financial reforms,
trade liberalization and reform of the International Monetary
Fund and the World Bank.
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(Reporting by Louise Egan; editing by Peter Galloway and Frank
McGurty)

UPDATE 1-Canada says G20 enthusiasm for bank tax is limited