Move to levy charges on banks for bailouts in US
Thursday, 22 April 2010
From Fazle Rashid
NEW YORK, April 21: The move to levy charges on the banks to cover the cost of any future government-led rescues is gaining increasing support. The move received a big boost with the International Monetary Fund ( IMF ) throwing its weight behind it yesterday.
Two IMF proposals are a part of a 56-page interim report, a fair and substantial contribution by the financial sector, prepared at the request of the G20. The reports findings are expected to be discussed when G20 finance ministers and the central bank governors meet in Washington on Friday on the margins of annual joint spring meeting of the World Bank and the IMF, the New York Times reported today.
It was British prime minister Gordon Brown who floated the idea of a tax on all financial transactions. The Obama administration initially rejected the idea but backtracked. President Obama in January this year called for a $90 billion, ten year levy on banks to recoup the cost of bailouts. The new IMF report is not binding will face resistance from many G20 nations.
The US and Britain support the move but Canada is against it. The IMF has suggested that G20 nations start with a flat tax on all financial institutions. Lobbyists are thronging the Capitol Hill and the White House to plead for soft measures to rein in over ambitious bank schemes
Meanwhile Democrats and Republicans in the US Senate are bridging their difference on Financial Regulation legislation. But Republicans are saying it could take weeks to reach a deal. Democrats are portraying the Republicans as siding with wealthy Wall Street interests in opposing tougher financial regulations. Some banks are saying that stiff regulations to prevent recklessness by the banks could prompt them to migrate to other financial centres.
NEW YORK, April 21: The move to levy charges on the banks to cover the cost of any future government-led rescues is gaining increasing support. The move received a big boost with the International Monetary Fund ( IMF ) throwing its weight behind it yesterday.
Two IMF proposals are a part of a 56-page interim report, a fair and substantial contribution by the financial sector, prepared at the request of the G20. The reports findings are expected to be discussed when G20 finance ministers and the central bank governors meet in Washington on Friday on the margins of annual joint spring meeting of the World Bank and the IMF, the New York Times reported today.
It was British prime minister Gordon Brown who floated the idea of a tax on all financial transactions. The Obama administration initially rejected the idea but backtracked. President Obama in January this year called for a $90 billion, ten year levy on banks to recoup the cost of bailouts. The new IMF report is not binding will face resistance from many G20 nations.
The US and Britain support the move but Canada is against it. The IMF has suggested that G20 nations start with a flat tax on all financial institutions. Lobbyists are thronging the Capitol Hill and the White House to plead for soft measures to rein in over ambitious bank schemes
Meanwhile Democrats and Republicans in the US Senate are bridging their difference on Financial Regulation legislation. But Republicans are saying it could take weeks to reach a deal. Democrats are portraying the Republicans as siding with wealthy Wall Street interests in opposing tougher financial regulations. Some banks are saying that stiff regulations to prevent recklessness by the banks could prompt them to migrate to other financial centres.