Blogs and advice from Industry leading Specialists
Valuable Opinions, Comments & Gossip
Financial related News & Articles relating to Spain
Latest News, Stories
& Hot Topics
Various Tools & Widgets to help with your financial needs
Tools & Widgets to
help with finances
Polls, Surveys and Opinions featured throughout Tumbit
Featured Polls, Surveys & Stats
Discussions, Advice & Topical Chat
Discussions, Advice & Topical Chat

UK joins G20 push for bank levy

Source: Reuters - Mon 9th Nov 2009

Britain threw its weight on Saturday behind proposals to impose a global levy on banks to fund future bailouts but failed to make much progress on securing a G20 deal to meet the cost of climate change.

Finance ministers and central bankers from the Group of 20, did commit, however, to a timetable for a new system of keeping an eye on each others' economies that would see countries present national and regional plans by the end of January.

They also agreed it was too early to pull the plug on the economic life-support packages in place as the global recovery was still uneven and dependent on ultra-low interest rates and the billions of dollars thrown into economies everywhere.

"We are not out of the woods yet" British finance minister and meeting host Alistair Darling said when the meeting ended.

Prime Minister Gordon Brown urged the G20 meeting - the third this year and being held in St Andrews, Scotland - to consider the bank bailout fund urgently. France and Germany have been in favour for some time of looking at a levy but London with its huge financial centre has always resisted.

Brown's Labour government, however, is trailing in opinion polls before an election expected in May and footing a multi-billion dollar bill for bailing out the banks at a time of huge public anger against bankers for their role in the crisis.

"We should discuss whether we need a better economic and social contract to reflect the global responsibilities of financial institutions to society" Brown said.

"There have been proposals for an insurance fee to reflect systemic risk or a resolution fund or contingent capital arrangements or a global transaction levy" he said. 


The question remains what sort of scheme could be agreed, with the United States also having resisted such measures.

Treasury Secretary Timothy Geithner said a day-to-day transaction tax was not something Washington would be prepared to support but also pointed to other ways in which banks could be made to contribute to the costs of future bailouts.

Canada Finance Minister Jim Flaherty also sounded doubtful about the tax: "It's one of the ideas that's on the table, but is not particularly attractive to me. We have been a government that has been reducing taxes."

Brown said the International Monetary Fund would review the possibility of a global levy and report back in April next year and that any measures would have to be globally implemented for Britain to go along.

The challenge ahead, the G20 said, will be the transition from crisis response to stronger and more sustainable growth as the global economy slowly emerges from the worst downturn since the 1930s.

To that effect, the G20, which was proclaimed as the world's new economic governing council in September at a summit in Pittsburgh, agreed to start a new consultative process to see if countries' economic plans "would collectively deliver our agreed objectives."

They will be assisted in their assessments by the World Bank and International Monetary Fund.

Countries will set national and regional policy frameworks by the end of January 2010 and then conduct an initial mutual assessment in April 2010, the draft said. 

Policy options would then be developed for leaders to consider in June 2010 with more specific recommendations to be made for November 2010.

Comment on this Story

Be the first to comment on this Story !!

Recommended Items