Open

Coming up

Don't miss

Replay


LATEST SHOWS

AFRICA NEWS

A landslide victory for the 'invisible candidate' in Algeria's Presidential polls

Read more

THE WORLD THIS WEEK

The World This Week - 18 April 2014

Read more

THE WORLD THIS WEEK

The World This Week - 18 April 2014 (part 2)

Read more

MEDIAWATCH

Presidential adviser resigns over "shoe-shine scandal"

Read more

#THE 51%

Breaking stereotypes

Read more

#TECH 24

Galaxy S5 v. HTC One (M8): Which is the right one for you?

Read more

FRANCE IN FOCUS

New PM Manuel Valls outlines priorities

Read more

FASHION

Jean-Marc Loubier, bags and shoes.

Read more

ENCORE!

Hip-hop musician Beat Assailant on mixing the sounds of the city

Read more

  • French journalist tells of release from captivity in Syria

    Read more

  • South Korea ferry captain defends decision to delay evacuation

    Read more

  • Scores killed in South Sudan cattle raid

    Read more

  • PSG clinch fourth League Cup title after beating Lyon

    Read more

  • Le Pen’s National Front fail to woo Britain’s Eurosceptics

    Read more

  • In pictures: French kite festival takes flight

    Read more

  • VIDEO: Anti-Semitic leaflets in Eastern Ukraine condemned

    Read more

  • In pictures: Good Friday celebrated across the globe

    Read more

  • Bouteflika, the ghost president

    Read more

  • Does Valls’ upcoming Vatican trip violate French secularism?

    Read more

  • Ukraine separatists say ‘not bound’ by Geneva deal

    Read more

  • Abel Ferrara’s hotly awaited DSK film to premiere on web

    Read more

  • Obama signs bill to block controversial Iran diplomat from UN post

    Read more

  • Ukraine: ‘One bloody incident could scupper Geneva deal’

    Read more

  • Astronomers discover Earth-like planet that could support life

    Read more

  • Indian election: Votes for sale

    Read more

  • World honours Garcia Marquez’s magical literary legacy

    Read more

  • In pictures: Iranian woman pardons son’s killer at the gallows

    Read more

  • Algeria's ailing Bouteflika clinches fourth term amid fraud claims

    Read more

  • Top Hollande adviser resigns over conflict of interest accusation

    Read more

  • West African Ebola outbreak caused by new strain of virus

    Read more

Europe

EU Commission wants bank levy to pay for future crises

©

Video by Frederic SIMON

Text by News Wires

Latest update : 2010-05-28

The European Commission unveiled Wednesday a proposal to tax banks to create a bailout fund for future crises. The EU's financial head Michel Barnier said the plan was "logical" and did not require US support.

AFP - Banks will never again be allowed to call on taxpayers to clean up their mess under plans for a new Europe-wide crisis insurance levy unveiled on Wednesday.
  

"What I'm proposing is logical -- banks paying for banks, not taxpayers," the European Union's financial services chief, former French foreign minister Michel Barnier, said after setting out the grand lines of a new insolvency tax on banks to be raised by each of the bloc's 27 member countries.
  
Barnier stressed that the levy would operate at national level but did not exclude the possibility that monies collected within one territory could be accessed by banks in trouble in another.
  
"We're going to have to look closely into this question," he said, having earlier pointed out that "in half of all European countries, half of their banks are owned by groups from other countries."
  
However, he stressed that what is on the table is "not a European, federal fund (but a) ... pragmatic and realistic" course of action to follow today.
  
"Prevention is better than cure -- and it's always cheaper," Barnier said, citing the vast cost to European governments -- some 13 percent of economic output -- to bail out banks since the financial crisis broke in late 2008.
  


He said that the collapse of US banking giant Lehman Brothers, which unleashed the world's deepest recession since World War II, showed the "disastrous secondary effects of not having orderly systems in place."
  
At the same time, he insisted that the tax plans would create "a fund for prevention, not for bailouts."
  
Barnier refused to say how much banks would be required to pay into the European 'resolution' fund.
  
"I can't put a figure on it, we need to have those discussions across the sector," he said, aiming to have detailed legislative proposals to put to countries and the European parliament by "the start of next year."
  
Sweden introduced a new 0.036 percent levy on banks' final balance sheets in 2009 and has tabled formal EU proposals to see its scheme matched across the bloc.
  


In Germany, a fund running to one billion euros each year, paid into by banks there, is also being prepared.
  
Under the commission's plan, the proceeds of the tax could be used to make bridging loans to financial institutions deemed to be viable.
  


The funds could also be used to help banks get rid of bad assets and offer legal and administrative help to banks that have to close down.
  
According to commission chief Jose Manuel Barroso, the levy should be obligatory.
  
Eurosceptics fear that the plans are transitional and Britain's business secretary Vince Cable warned on Tuesday that any moves further down the line to create "a kind of insurance fund for future bailouts ... would cause some alarm in London."
  
Europe is due to have a new system of financial supervision and regulation in place on January 1, 2011, separately covering banks, insurers and financial markets, although arguments have raged for months within EU member states and at the European parliament.
  
Last week, EU finance ministers agreed the need for "strict" new curbs on the trillion-dollar hedge fund industry, despite stiff resistance from British finance minister George Osborne.
  
In July, Barnier said he will also propose ideas to regulate complex derivatives markets, with a coordinated European approach to short-selling and Credit Default Swaps, both of which have been blamed for exacerbating Europe's debt crisis.
 

Date created : 2010-05-26

  • EUROZONE

    Geithner urges unity as EU nations forge ahead on reform

    Read more

  • EUROZONE

    A wave of austerity measures engulfs struggling EU economies

    Read more

Comments

COMMENT(S)