THE WORLD’S most advanced economies have begun to coalesce around the idea of imposing forward-looking levies on banks to help insure the global economy against financial crises, officials said after a Group of Seven (G7) meeting in Canada.
Timothy Geithner, US treasury secretary, and Alistair Darling, his British counterpart, were among those who voiced support for a levy on banks considered “too big to fail”, the officials said after the two-day meeting in the Canadian town of Iqaluit, just below the Arctic Circle.
“We discussed in the longer term whether or not it would be appropriate to have a levy on the banking industry to reflect the costs that have been imposed as a result of what has happened. It’s early days but ... we agreed to work together on this,” Mr Darling said.
The G7 ministers will seek support for such a levy, which could take the form of a transaction tax or a fee on deposits held, among the members of the broader G20 – which includes emerging economies such as China, India, Russia and Brazil – before they meet this year. The G7 ministers had agreed to work towards implementing a fresh set of capital requirements for large institutions by the end of 2010, with the International Monetary Fund set to report on options by the end of April.
Analysts have said that differences of opinion between nations on banking rules are “irksome” and have warned that banks could take advantage of different rules by moving to the least restrictive regulatory environment.– (Copyright The Financial Times Limited 2010)
