According to the Financial Times, the Prime Minister is claiming that the backward-looking levy imposed on banks by Barack Obama earlier this month was “not dissimilar” to the kind of proposals he made at last year’s G20 meeting in St Andrews.
Gordon Brown predicted a global agreement on a new levy on banks on Monday, but there are growing fears that describing the charge as an “insurance fee” could encourage financial institutions to become more reckless.
Finance ministry officials from around the world debated the plans at a Downing Street seminar on Monday, where concerns were raised that charging banks for insurance could create moral hazard.
While the language around any levy might be causing problems, there is a growing view in Downing Street that Group of 20 countries will embrace some kind of charge to reflect the risks banks pose to financial stability.
Mr Brown said: “I think you will probably see further moves to get an international agreement about some international levy to deal with the responsibility that banks owe to society.”
The prime minister claimed that the backward-looking levy imposed on the banks by Barack Obama earlier this month was “not dissimilar” to the kind of proposals he made at last year’s Group of 20 meeting in St Andrews.
Mr Brown insisted on Monday that the British government would not impose a retrospective charge because he said he was already confident “we will make a profit” from the taxpayer’s rescue of the banking system, including RBS and Lloyds.
But he believes that Mr Obama’s crackdown on the banks has raised the likelihood that the world’s leading economies can agree higher capital levels for banks and some kind of levy on the sector.
The International Monetary Fund will report on various options in April and the issue is expected to be at the top of the agenda of November’s meeting of the G20 in South Korea.
© Financial Times
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