Geithner urges lawmakers to support bank fee

05 May 2010

The fee would be applied over a period of at least ten years and is estimated to raise about $90 billion. However, it should stay in place longer, if necessary, to ensure that the cost of TARP is fully recouped, he said.

In a testimony before the US Senate Committee on Finance, Secretary of the Treasury Timothy Geithner called for support on the Financial Crisis Responsibility Fee as proposed by the Obama administration in January, and which he calls “important complement to the financial reforms”.

The fee is to make sure that the direct costs of TARP are paid for by the major financial institutions.  It would be applied over a period of at least ten years and is estimated to raise about $90 billion. However, it should stay in place longer, if necessary, to ensure that the cost of TARP is fully recouped.

“The fee is designed to fall most heavily on firms that fund riskier activities with less stable forms of funding, and thus excludes over 99 percent of U.S. banks, which currently provide the majority of small loans to businesses and farms across the country”, Geithner said.

Full testimony

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