Feb 4 (Reuters) - The world's seven richest nations will discuss ways to ensure the global economic recovery is here to stay and to reform the international banking system in a meeting this Feb. 5-6 in Canada's Far North.
The G7 finance ministers and central bank governors, meeting in Iqaluit, near the Arctic Circle, will not issue a formal communique as they have usually done in the past.
Here are the main issues they are expected to discuss:
FINANCIAL REGULATION
At the top of the agenda will be a discussion of the G20 framework for financial regulation, including higher and better quality capital, dealing with banks that are deemed "too big to fail", and bankers' bonuses. Policy makers had worried that the financial reform agenda would fall by the wayside as the global economy recovered and banks returned to profit, but U.S. President Barack Obama's bank reform plan has put the issue back in the spotlight in time for the Iqaluit talks.
The ministers are expected to pledge to co-ordinate their reform efforts to avoid widely differing regulatory regimes.
GLOBAL RECOVERY, EXIT STRATEGIES
Ministers and governors will agree on the need to follow through with stimulus policies this year, given the fragility of the global recovery and shallow private sector growth. But countries running large debts will have to provide clear signals about their plans to bring government finances under control. The United States and Japan will likely share details of their budget plans.
CURRENCIES
Foreign exchange policies and in particular the G7's perennial call for greater appreciation of the Chinese yuan, will be discussed, but only as part of broader talks on a framework for sustainable and balanced growth.
FUTURE ROLE OF G7
Time will be set aside exclusively to discuss the future of the G7 now that the G20 group of emerging and industrialized nations has been designated as the premier forum for global economic affairs. Most members say it still makes sense to meet informally and lead the financial reform push because they represent the world's major financial centers.
Some guidance is expected on whether the finance ministers and governors will hold separate meetings after Iqaluit or simply hold breakaway sessions on the sidelines of G20 gatherings.
DEVELOPMENT AND TRADE
Financing Haiti's reconstruction will likely dominate the session on development, although no concrete pledges will be forthcoming. Countries will reiterate that they must resist protectionist temptations during the economic recovery.