Saudi won't buy European sovereign debt

Saudi Arabia does not plan to buy European government bonds, the Gulf oil producer's central bank governor Muhammad al-Jasser was quoted as saying on Sunday.

"There are no plans to buy European sovereign debt," Jasser was quoted as saying by a Saudi daily on the sidelines of the G20 summit in Toronto.

Leaders of the world's 20 leading nations meeting in Toronto this weekend are seeking ways for countries to cut public debt without undermining a fragile global economic recovery.

Jasser also said the Arab Gulf country will not implement proposed new bank taxes.

Germany, France and Britain are planning additional taxes but Canada and several emerging market economies in the G20 do not want to do likewise.

The draft summit communique obtained by Reuters showed countries would be given a choice whether to levy taxes on banks to recoup bailout costs, and can phase in stricter bank capital rules to fit national needs.

Since the onset of the financial crisis the world's largest oil exporter has boasted that its conservative regulations had protected banks from the worst effects of the credit crunch.

But debt restructuring in Saudi family-owned businesses trimmed credit growth, which has now started to pick up slowly after stalling at the turn of the year.