UK’s Myners calls for global debate on bank levy

By Reuters Staff
January 18, 2010

LONDON, Jan 18 (Reuters) – Britain’s financial services minister Paul Myners said on Monday he wanted to promote a global debate on how to protect taxpayers from future investment bank failures and warned banks against paying big bonuses.

Myners will host a meeting of representatives from the G7, the World Bank and the IMF in London on January 25 during which an American-style insurance levy on financial institutions will be discussed in an attempt to avoid costly bailouts in the event of another crisis.

“We want to promote a global debate about this,” he told BBC radio.

“Gordon Brown made a very good speech at the G20 finance ministers’ meeting in St Andrews in November which we then followed up in the Treasury with a publication of a document setting out a number of ways in which the implicit guarantee could be internalised by the banks through a transaction tax, or through some form of deposit levy.”

He said the government was looking at the “very broad principles” because international cooperation would be needed.

The opposition Conservative Party, on course to win a national election due to be held before June, has said it is in favour of an insurance levy scheme as long as the Group of 20 group of developed and emerging nations agreed to it.

Myners said Britain had gone further than any other country in trying to tackle bank bonuses, including a one-off tax.

He said it was having an impact, but was unable to say how much money the tax would raise, or how big the bonus pool would be this year after exceptionally strong profit performances.

“We expect remuneration committees of these boards, who are the final arbiters, to look very carefully at what drove the profits and how much should be rewarded for talent and how much should be retained to support for lending for the future,” he said.

(Reporting by Avril Ormsby; Editing by Jon Loades-Carter) ((avril.ormsby@reuters.com ; +44 207 542 1816; Reuters Messaging: avril.ormsby.reuters.com@reuters.net))

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