G7 to press on with bank reforms,gives Japan free pass

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 world financial crisis began.

It is important to complete swiftly our work to ensure that no banks are too big to fail, Osborne told reporters after hosting a two-day meeting in a stately home 40 miles outside London.

We must put regimes in place … to deal with failing banks and to protect taxpayers and to do so in a globally consistent manner, he said.

Germany has previously come under pressure to give more support to a banking union in the euro zone. The plan could help strengthen the single currency area,but Berlin worries it may pay too much for future bank bailouts if it signs up to a scheme to wind up failing banks.

As at previous international meetings,Japan escaped any censure for printing money on a scale that has pushed the yen sharply lower.

Osborne said the G7 – the United States,Germany,Japan,Britain,Italy,France and Canada – reaffirmed that fiscal and monetary policy should be aimed at domestic concerns,not currency manipulation

We will not target exchange rates, Osborne said at the end of the meeting at the 17th-century Hartwell House. I would say that the statement by the G7 of earlier this year was a successful statement and one that has been held to.

Some countries are concerned Tokyo is engineering an export-led recovery that could hinder other regions ability to grow.

The yen hit a four-year low against the dollar on Friday,beyond the psychologically important 100 yen mark,driven in part by Japanese investors shifting into foreign bonds,a move that had been expected since the Bank of Japan unveiled a massive stimulus plan.