EU exec to propose bank levy on Wednesday-Barroso

BRUSSELS, May 25 (BestGrowthStock) – The European Commission will
propose on Wednesday a levy on European banks which would pay
for potential future bailouts of financial institutions,
Commission President Jose Manuel Barroso said.

The European Union has been pushing to agree on a bank levy
at the G20 level of the biggest industrialised and developing
economies to keep a level playing field for financial
institutions internationally.

But although there is broad support for taxing banks in the
wake of the economic crisis, political leaders disagree as to
how it should be done and how the money raised should be spent.

“The Commission will adopt tomorrow a communication on bank
resolution funds… financed by the banks themselves in order to
minimise the cost to taxpayers of an orderly resolution of
insolvent banks,” Barroso told an economic conference.

There has been opposition to imposing a new a levy on banks
from Canada, whose banks required no help from public coffers
during the financial crisis, and even within Europe ideas differ
on what the money from the levy could be used for.

Some countries want a levy to repair public finances, while
others would channel it into funds to wind down struggling
banks. European Union officials have said the 27-nation bloc
could also go it alone if there is no agreement within the G20.

The International Monetary Fund proposed new taxes on banks
worldwide in an effort to make financial services firms pay for
their own rescues. One would cover the cost of future financial
sector bailouts and the other would tax banks’ profits to
bolster national budgets.

Investment Analysis

(Reporting by Jan Strupczewski and Marcin Grajewski, editing
by Jason Webb)

EU exec to propose bank levy on Wednesday-Barroso