Korea to Chair G20 Finance Ministers’ Meeting

High-ranking Korean officials will chair April 23 in Washington the Group of 20 Finance Ministers and Central Bank Governors Meeting, a forum on bringing about a new global economic order.

With the proposed global bank tax on the agenda, the Korean government began to review the introduction of similar measures befitting the country’s situation.

The Strategy and Finance Ministry yesterday said Strategy and Finance Minister Yoon Jeung-hyun and Bank of Korea Governor Kim Choong-soo will co-chair the meeting.

Korea chaired the finance ministers` meeting of the Association of Southeast Asian Nations Plus Three (China, Japan and Korea), but this will be the first time for Korea to chair such a large-scale international conference.

The finance ministers of leading economies, including U.S. Treasury Secretary Timothy Geithner, Chinese Finance Minister Xie Xuren, U.K. Chancellor Alistair Darling, and Japanese Finance Minister Naoto Kan, will attend the meeting.

Topping the meeting’s agenda will be the introduction of a global bank tax being considered by the U.S., the U.K., Germany and France. Washington and London want to impose taxes on short- or long-term debts, such as debt borrowings denominated in foreign currency, to recover public funds injected into banks since the onset of the global financial crisis in 2008. Berlin and Paris plan to raise funds by imposing bank taxes not to recover public funds but to prepare for another crisis.

Developing G20 countries oppose the tax, however, since their financial industries are still in the developmental stage.

Korea, which will host the G20 summit in November, is also reviewing the proposed bank tax, but is unlikely to apply a uniform tax rate since it has emergency measures against another financial crisis. Seoul has recovered nearly all of its public funds injected into banks after the global financial crisis broke out and raised restructuring funds worth 40 trillion won (36 billion U.S. dollars) last year.

Minister Yoon told a ministry meeting yesterday, “The adoption of the global bank tax will be a main agenda item at the G20 meeting,” adding, “We are listening to the opinions of member countries from the perspective of a mediator and preparing for the issue while carrying out intense discussions within the government.”

legman@donga.com