Posted on 04/05/2010 6:50:30 AM PDT by BradtotheBone
Gordon Brown on Sunday said the large economies were close to agreeing a global tax on banks that would cost the financial sector billions of pounds a year but played down expectations that a deal could be struck at the next Group of 20 meeting in June.
The UK prime minister, who held talks with Angela Merkel, German chancellor, last week, said the scene was set for a “global responsibility levy”. He said Britain, France and Germany were now broadly agreed on the need for a levy, and he hoped the US would come on board.
“Britain, France and Germany have talked about what we can do together,” he said. “We are agreed on the need for a common basis.”
Last week, France and Germany jointly backed an internationally co-ordinated levy.
Mr Brown told the Financial Times he wanted to reignite the spirit of global co-operation, which had faltered in the year since last April’s G20 summit in London.
Although a British election is expected in little more than a month, Mr Brown is engaged in frenetic international diplomacy to broker a global settlement for banks. “The relationship between banks and society has to change,” he said.
He wants a global levy to be agreed at the G20 summit in Seoul in November, along with capital rules to reinforce banks against a future crisis.
Bank bonuses FT In depth: Remuneration for executives and employees remains under scrutiny Many bank watchers had been geared up for an initiative at the June summit in Toronto but Canada is sceptical. Mr Brown wants the tax agreed on a multilateral basis, using a common base if possible.
The US has used a levy on wholesale funding but Mr Brown says he has an open mind on whether the tax should target assets or liabilities.
He declined to say how much the tax might raise from UK banks, but cited the annual €1.2bn envisaged by Ms Merkel for German banks and $10bn (€7.4bn) planned for the US levy as examples.
Given the relative size of the UK banking sector, that would suggest Mr Brown is eyeing a levy in Britain of several billion pounds.
Mr Brown said he had agreed with Ms Merkel it should be left to individual countries to decide how to spend the proceeds of the levy.
Germany wants to create an insurance fund to protect against future bank failures but Mr Brown fears this could create moral hazard and encourage risky behaviour by banks.
He is also concerned that any extension of the US bank tax – designed to pay for past bail-outs – could run into congressional problems.
The prime minister believes that the problems in the banking sector have not been fully resolved. Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.
Funny how they never seek a consensus to shrink government.
What, in the US Constitution, allows for the US to submit to an agreement that is essentially an international tax?
This is taxation without representation, which is not sanctified by our election of the US officials who will agree to this sham.
These international taxes imposed by executive fiat cannot stand, and must be fought!
Tax anything that moves, breathes or sparkles.
This has to be stopped.
Hell no it won't! A "global tax on banks" isn't going to "cost" them one thin pence. Banks don't have a magical pot of money to pay new taxes from, Mr. Brown, and you know it. This tax, like all other taxes levied by any gubmint against any company will be passed on to the customers. Ultimately, the end consumer pays all taxes. This guy is a terrible liar.....
Insanity.
Seems catchy. Just keeps getting worse with every passing day......
British, Ethiopian PMs, UN meet over $100 billion ’climate fund’
The carbon tax was going to generate the money.
Thanks Ernest
Hopey Changee Obama is OK with them....
ping.
Scared me for a second.... thinking Jerry Brown.
Gordon Brown can’t go away too soon.
The Competitive Enterprise Institute will be bestowing the Julian Simon Award on Steve McIntyre and Ross McKitrick for their efforts in debunking Mann's hockey stick at CEI's 2010 Dinner, June 17 at Hyatt Regency Capitol Hill 400 New Jersey Ave. NW Washington, DC 20001.
Looks like Brown is among the biggest crooks in the modern world. When are the Brits going to go after him with pitch forks and torches.
Won’t work. The only thing that will is pulling funding for the so-called studies, eliminating the budgets of the demagogues pushing the agenda, and if they continue to make trouble, show trials and executions. Naturally, I’d prefer to skip to the end of that sequence, but I’m funny that way. :’)
I can appreciate your sentiments. I too, would skip to the last two actions.
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