Italy proposes broadening G7, changing IMF

WASHINGTON (Reuters) - Italy will propose broadening the Group of Seven nations and giving new and different tasks to the International Monetary Fund and World Bank, Italian Economy Minister Giulio Tremonti said on Saturday.

Speaking to reporters at the Italian Embassy, Tremonti also said sweeping radical reform of market regulation should include a discussion on the abolition of hedge funds. Italy will assume the rotating presidency of G7 in January. Tremonti had outlined his ideas to the G20 club, which includes both leading and emerging economies, earlier on Saturday.

"We propose to go beyond the G7 framework to adopt a larger structure," he said. He did not suggest which or how many new countries should enter the exclusive rich nations group, saying that for now he was calling it the GX.

Tremonti said Italy would propose that the IMF and the World Bank "can be used for different goals," and be given new tasks to complement their current ones.

Tremonti has spoken on several occasions of the need to "redesign the Bretton Woods" agreement, which established the post World War Two global financial structure.

The rewriting of financial market rules should target "absolutely crazy bodies, like hedge funds which have nothing to do with capitalism."

Asked if he was suggesting that hedge funds should be banned, he said "we have to launch a discussion about this."

(Reporting by Gavin Jones; Editing by Neil Stempleman)