G20 not yet agreed on bank levy: -UK’s Darling

By Matt Falloon and Sumeet Desai

LONDON (BestGrowthStock) – Global policymakers are still wrangling over how a tax on banks would work and must use a meeting next month to agree details, British finance minister Alistair Darling told Reuters in an interview on Thursday.

Britain proposed four possible ways to protect taxpayers from banks taking on excessive risk at a G20 meeting in November — an insurance levy, a resolution fund, higher capital requirements or a transactions tax.

The International Monetary Fund was tasked with investigating how the four options might work and is due to report back to the G20 group of developed and emerging economies next month.

Darling said attention is now focusing on some kind of global levy, but there was no agreement yet.

“There is a discussion to be had precisely how such an international levy would work,” Darling said.

“We put forward a number of proposals but the one which appears to be attracting more attention is perhaps an international levy — but the detail is still something which is up for discussion and indeed will be discussed at the IMF meetings in Washington in April.”

Germany has put forward its own proposals and the United States has already announced an annual levy of 0.15 percent on total assets, but Darling said moving forward unilaterally would pose a threat to the British economy.

“Countries can’t go it alone. It is very important that we do this internationally,” he said.

“If you do something unilaterally, all that will happen is that the banks will just go somewhere else. You’ll lose jobs, you’ll lose a whole lot of things. I won’t do anything that damages London or indeed the industry in the rest of the country.”

Britain’s opposition Conservatives, who could be in power after an election expected on May 6, have said they could unilaterally introduce a watered-down bank tax if global agreement was not possible, but have admitted such action may not raise much cash.

European proposals for a tax on financial transactions — the so-called Tobin tax — have not found favor elsewhere and not all countries want to impose further capital regulations on their banks.

Darling dismissed the charge that financial markets had not been impressed by his budget on Wednesday, which offered no new detail on budget deficit reduction, even though he lowered his borrowing forecasts.

Labour has enshrined in law its promise to halve a record budget deficit of just under 12 percent of gross domestic product over four years.

“Look, markets go up and down every day, they go up and down for a whole host of reasons,” Darling said.

“What I had to do yesterday was to set a very clear plan, not just about what we’ve done and where we are just now, but actually the important thing for this country in the next 10 or 20 years is to have a credible plan for the future and I think we’ve got that.”

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(editing by John Stonestreet)

G20 not yet agreed on bank levy: -UK’s Darling