from MacroScope:
A “Greed Tax” on banks
The International Monetary Fund has done what it was bid by the G20 and come up with proposals for getting banks to pay for the government help they receive when they get in trouble. You can read the actual wording here, but it comes down to this:
1) A "Financial Stability Contribution" which would be pooled into a fund that would use it to help weak banks, or just go into general government revenues.
2) A "Financial Activities Tax" -- perhaps intentionally known as FAT -- to be levied on combined bank profits and remuneration (for which read "bonuses") and paid to governments.
The first is a kind of insurance policy. The second, however, looks decidedly like what might be called a Greed Tax -- government action on the kind of wealth that has infuriated taxpayers across the world.
The debate will be over whether this is simple kowtowing to populist sentiment or whether it is a reasonable limit on people being accused of knowing none.
SCENARIOS – G20 efforts to agree on a bank levy
By Huw Jones
LONDON, March 31 (Reuters) – France backed Germany’s plans for a bank levy on Wednesday to boost momentum for a global deal among the G20 group of leading countries later this year.
But national differences are emerging over details and some countries oppose the principle of a levy or tax.
NEXT STOP WASHINGTON
The IMF was asked last November to put forward proposals for making banks contribute towards bailouts and will present its recommendations to G20 finance ministers in Washington on April 24-25
IMF Managing Director Dominique Strauss-Kahn has said a “Tobin tax” on financial transactions is unworkable and he would propose some form of levy.
The G20 summits in Toronto in June and Seoul in November will then try to hammer out a global bank levy deal.
EXCLUSIVE – IMF exploring insurance levy on banks
By Brian Love PARIS, Nov 8 (Reuters) – The International Monetary Fund is exploring the idea of making banks pay insurance fees to fund any future rescues in the sector, IMF managing director Dominique Strauss-Kahn said on Sunday.
UK gives impetus to global banks tax, U.S. doubtful
By Huw Jones ST ANDREWS, Scotland, Nov 7 (Reuters) – Britain urged world governments on Saturday to consider a levy on banks to fund future bailouts, departing from long-held opposition, though there was little sign of the consensus needed to make it fly.
British Prime Minister Gordon Brown raised the idea at a weekend meeting of Group of 20 financial leaders in Scotland — ending London’s resistance to such moves on behalf of its huge financial sector.The United States, key to the success of any global initiative, rejected a tax on day-to-day transactions, though it left the door open to other ways to protect taxpayers from losses. Canada was also lukewarm.
“A day-by-day financial transaction tax is not something we are prepared to support,” U.S. Treasury Secretary Timothy Geithner told reporters.
“This idea (of a bank transaction tax) has been around for a long time … I think frankly the experiences are mixed.”
In a briefing later, though, he also signalled the United States would engage in work to seek ways to recoup the costs of future bailouts and protect the economy and important institutions like pension funds from banks’ losses.
“I think it’s fair to say that this view is shared by many countries that we need to build a system in which tax payers are not exposed to such risks in future,” Geithner told reporters.
British Prime Minister Gordon Brown joined earlier calls from France and Germany in saying it was time for banks to give something back after governments have poured billions of dollars to shore up the sector.
G20 ministers to keep stimulus, seek ways to coordinate economies
By Sumeet Desai ST ANDREWS, Scotland, Nov 6 (Reuters) – The Group of 20 leading nations will agree this weekend it is too early to pull the plug on emergency support for the global economy and launch a new system of checks to help rebalance world growth and prevent future crises.
India buys half of IMF’s gold for sale; who’s next?
By Surojit Gupta and Lesley Wroughton MUMBAI/WASHINGTON, Nov 3 (Reuters) – The International Monetary Fund has sold 200 tonnes of gold to the Reserve Bank of India for $6.7 billion, quietly executing half of a long-planned bullion sale. The deal fuelled speculation that other governments — including China — may be ready to diversify their reserves even at near-record gold prices.
IMF approves Iceland review, to disburse $167.5 mln
By Lesley Wroughton WASHINGTON, Oct 28 (Reuters) – The International Monetary Fund on Wednesday approved a long-delayed review of Iceland’s economic performance under an IMF loan program and said the crisis-hit economy could begin to turn the corner by the middle of next year.
France, China worry about U.S. dollar weakness
By Gertrude Chavez-Dreyfuss and Emmanuel Jarry NEW YORK/PARIS, Oct 20 (Reuters) – France said on Tuesday the euro at $1.50 was a disaster for Europe and joined China in worrying that a weak U.S. dollar would stoke inflation.
Iceland says has new repayment deal with UK, Holland over deposit losses
By Omar Valdimarsson REYKJAVIK, Oct 18 (Reuters) – Iceland said on Sunday it had agreed to a new deal to repay Britain and the Netherlands billions of dollars of deposits lost when the island’s banks collapsed in 2008, paving the way for new aid from international lenders. (more…)
EU central banker Noyer wants more balanced currency system
ROUEN, France, Oct 13 (Reuters) – Having a more balanced world currency system is a good idea but Special Drawing Rights are not an instrument that can replace the U.S. dollar, ECB governing council member Christian Noyer said on Tuesday.
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