EU parliament backs creation of bank crisis fund
By John O’Donnell
STRASBOURG, France, Feb 9 (Reuters) – The European Parliament is set to back a proposal that would force banks to pay into an emergency fund designed to help cope with future financial crises, a document seen by Reuters shows.
Earlier this year, Sweden’s finance minister called on European counterparts to follow U.S. President Barack Obama’s lead with a bank tax to recoup the cost of propping up the industry — an idea that Germany is now considering.
The European Parliament, a powerful institution that will write any new bank tax into EU law, is set to give the idea a thumbs up, according to senior members of the assembly.
In a report outlining how Brussels should set up a new authority to police banks, lawmakers outline their desire to establish a so-called European Financial Protection Fund to protect savers, banks in difficulty and the broader market.
“This Fund will be financed through contributions from these institutions, debt issued by the Fund or in exceptional circumstances through contributions made by the affected,” parliamentarians propose in a report written by Spanish deputy Jose-Manuel Garcia-Margallo Y Marfil.
The lawmakers, who are currently working on new rules to tighten the policing of banking and place curbs on runaway lending, also highlight how EU countries could help foot the bill in an emergency.
In the report, which has yet to be published officially, lawmakers also signal scope for a compromise with EU countries on the powers that should be given to new pan-European super-authorities to police banks as soon as next year.
Earlier this year, Obama proposed that Wall Street pay up to $117 billion via a special levy to reimburse taxpayers for the financial bailout, saying “fat cat” bankers were making massive profits and “obscene” bonuses.
Sweden has embarked on a mission to recoup roughly 75 billion Swedish crowns ($10.6 billion) from its banks that will then be set aside in a fund to cope with financial crises.
It opted for a direct levy on bank loans rather than a tax on transactions — such as buying investments — because a similar move after the country’s 1990s banking crisis backfired.
Britain’s opposition Conservatives, who are widely expected to return to power at national elections this year, have also voiced support for the Swedish idea if applied globally. (Editing by Andy Bruce)
((Reporting by Julien Toyer, writing by John O’Donnell, +32 2 287 6817 or +32 473 92 48 90; email@example.com))