AFME statement on UK bank tax: it is effective regulation - not taxation - that will help prevent a future crisis
23 June 2010
AFME warns that the tax does not reduce risk in the financial system. Moreover, AFME believes that a unilateral UK bank levy could adversely affect an important sector of the UK economy and threaten the UK’s future as the world’s leading financial centre.
AFME is pleased to announce that the opportunity has been taken to provide further details of the bank tax. But it is important to recognise that it is effective regulation - not taxation - that will help prevent a future crisis. This tax is not a substitute for effective regulation.
The tax does not reduce risk in the financial system. There is also clear a need for government, regulators and firms to work together to develop a robust regulatory structure that includes a resolution regime that will cope with bank failures without having to resort to taxpayers. AFME looks forward to working with the authorities on the prudential regulation initiatives.
A unilateral UK bank levy could adversely affect an important sector of the UK economy and threaten the UK’s future as the world’s leading financial centre. AFMA will be watching carefully to see whether the actions of France and Germany are consistent with those of the UK and will continue to contribute to the discussion led by the IMF on a Financial Activity Tax.
© AFME
