Tags: IMF | Pushes | Britain | Triple | Bank | Tax

Report: IMF Pushes Britain to Triple Size of Bank Tax

By    |   Tuesday, 06 Jul 2010 09:25 AM

The International Monetary Fund reportedly is pressing for Britain's banks to pay an annual levy of up to 6 billion ($9.12 billion) pounds to protect against the impact of future crises and curb the more reckless behavior of the industry.

That is far higher than British Chancellor George Osborne's plan for a 2 billion pound bailout tax on the sector.

The IMF said the financial crisis had shown that the world's banking sector was undertaxed and should be subject to a coordinated levy by the G-20 nations, the U.K. Guardian reported.

In a report looking into the possibility of a global levy, it said a "financial activities tax" on profits and remuneration of financial institutions, "could raise significant revenue and be designed to serve a range of purposes."

The IMF said a tax covering profits and bonus payments should be added to a levy on banks covering the risk they pose through their activities, the Guardian reported. But the IMF rejected a "Robin Hood" tax on financial transactions called for by campaigners to pay for aid and development programs.

The report said it believed a lack of transparency around the costs to individual institutions of such a tax would mean it could be passed on to consumers through increased charges.

Meanwhile, the European Union’s monetary affairs chief has said that results of the stress tests imposed on European Union banks should be completely transparent to help boost confidence in the bloc's economy.

EU government leaders said last month they would disclose the results of stress tests on the region's banks but left many questions unanswered as to how testing would work, Reuters reported.

The results, which policymakers hope will reassure investors that EU banks are sound and boost fragile market confidence in the EU economy, are to be released around July 23.

With financial markers unsure what exactly will be published, EU Monetary Commissioner Olli Rehn said the results should be fully transparent.

"The (European) Commission is in favor of full transparency and advocated the extension of bank stress tests and the publication of the results by the end of July," Rehn told European parliamentarians.

"This will help reduce uncertainty and restore confidence. The doubts about the health of the European banks need to be dispelled, which is why the stress tests are so important."

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The International Monetary Fund reportedly is pressing for Britain's banks to pay an annual levy of up to 6 billion ($9.12 billion) pounds to protect against the impact of future crises and curb the more reckless behavior of the industry. That is far higher than British...
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2010-25-06
Tuesday, 06 Jul 2010 09:25 AM
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