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| Brown hails move on global bank tax |
| 2010-04-05 |
| Gordon Brown on Sunday said the large economies were close to agreeing a global tax on banks that would cost the financial sector billions of pounds a year but played down expectations that a deal could be struck at the next Group of 20 meeting in June. The UK prime minister, who held talks with Angela Merkel, German chancellor, last week, said the scene was set for a “global responsibility levy'. He said Britain, France and Germany were now broadly agreed on the need for a levy, and he hoped the US would come on board. “Britain, France and Germany have talked about what we can do together,' he said. “We are agreed on the need for a common basis.' Last week, France and Germany jointly backed an internationally co-ordinated levy. Mr Brown told the Financial Times he wanted to reignite the spirit of global co-operation, which had faltered in the year since last April's G20 summit in London. Although a British election is expected in little more than a month, Mr Brown is engaged in frenetic international diplomacy to broker a global settlement for banks. “The relationship between banks and society has to change,' he said. He wants a global levy to be agreed at the G20 summit in Seoul in November, along with capital rules to reinforce banks against a future crisis. Many bank watchers had been geared up for an initiative at the June summit in Toronto but Canada is sceptical. Mr Brown wants the tax agreed on a multilateral basis, using a common base if possible. The US has used a levy on wholesale funding but Mr Brown says he has an open mind on whether the tax should target assets or liabilities. He declined to say how much the tax might raise from UK banks, but cited the annual €1.2bn envisaged by Ms Merkel for German banks and $10bn (€7.4bn) planned for the US levy as examples. Given the relative size of the UK banking sector, that would suggest Mr Brown is eyeing a levy in Britain of several billion pounds. Mr Brown said he had agreed with Ms Merkel it should be left to individual countries to decide how to spend the proceeds of the levy. Germany wants to create an insurance fund to protect against future bank failures but Mr Brown fears this could create moral hazard and encourage risky behaviour by banks. He is also concerned that any extension of the US bank tax – designed to pay for past bail-outs – could run into congressional problems. The prime minister believes that the problems in the banking sector have not been fully resolved. |
| Posted by:tipper |
| #2 A disaster for the world's economies. A coup for the rent-seekers. Time to route around their naked theft. |
| Posted by: Bright Pebbles 2010-04-05 21:26 |
| #1 Saw it coming, Banks have rooked people out of Trillions, now the Assorted Governments stand in awe, and with a largish hand out for "Their" Cut of the Boodle. |
| Posted by: Redneck Jim 2010-04-05 18:05 |