Group of Seven countries have their own ideas about bank regulation and do not need to follow the US lead, Canadian Finance Minister Jim Flaherty was quoted as saying by Japan's Asahi newspaper.

A senior US Treasury official has said the US intends to be very tough on its financial institutions and Washington wants to make sure that other countries apply equally stringent rules for capital and for behaviour to prevent excessive risk taking.

Finance chiefs from the G7 industrialised nations agreed at the weekend gathering in the Canadian Arctic town of Iqaluit that financial institutions should bear the costs of their contributions to the financial crisis.

But Flaherty was quoted as saying in an interview that each country should decide further steps by themselves as Britain, the US, Germany and France have their own ideas. The interview with the Asahi took place on Sunday and ran on Tuesday.

President Barack Obama has proposed additional rules that would limit proprietary trading by banks, put them out of the hedge fund and private equity business and limit their future growth through a new market share cap.

Some G7 members, including Britain, have expressed reservations about the US proposals and how they might work.

Flaherty also said in the interview that finance chiefs agreed to follow the informal format of the Iqaluit talks, which alowed them to speak their minds openly and freed them from long hours negotiating over the language of a communique.

Asked about China's economic and currency policy, Flaherty was quoted as saying that the G7 ministers discussed the issue of global imbalances but more talks should be held at G20 meetings which include both industrialised and developing countries. – Reuters