Commission publishes an analysis of the main innovative financing options
08 April 2010
The report presents several options discussed by Member States to ensure that the financial sector contributes to the costs of the current and potential future crises. For example, it considers the introduction of new taxes on leverage or risk taking by financial intermediaries.
Options for ensuring that the financial sector contributes to the costs of the current and potential future crises are currently being discussed in Member States and in various international fora.
In this context, consideration could be given to the introduction of new taxes on leverage or risk taking by financial intermediaries. Revenues from these new forms of taxation could be used to strengthen public finances, at least in part, as well as to tackle the costs of future crises. In any case, particular attention will have to be given to the implications for the incentives to take risk and the need to prevent moral hazard. The combined impact on the financial sector of a stability levy and the various regulatory measures being taken in response to the crisis should also be carefully assessed.
The matter of levies on financial institutions in the context of the establishment of resolution funds is not treated in this paper but will be addressed as part of the general forthcoming work of the Commission on the establishment of appropriate tools for crisis prevention and management in the financial sector.
Olli Rehn, EU Commissioner for Economic and Monetary Affairs, said: "Fiscal consolidation is necessary for sustainable growth and job creation. Therefore, the revenue potential of innovative financing needs also to be explored."
Michel Barnier, EU Commissioner for Internal Market and Services, said: “The financial sector needs to contribute to the costs of financial stability. This should be one of the building blocks in our effort to set up a crisis management framework in Europe"."
Algirdas Semeta, EU Commissioner for Taxation and Customs Union, said: “The considered innovative financing mechanisms provide a choice of modern tools which can serve multiple purposes such as improving the efficiency of markets, ensuring stability in the financial sector as well as fight against climate change."
© European Commission
