G20: No agreement reached on global bank levy
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Leaders at the Toronto G20 summit have failed to reach an agreement on implementing a global banking levy.
At the summit this weekend, global finance leaders agreed to halving budget deficits by 2013 and also to significantly boost the capital held by their banks, however the agreement did not include any plans for a global tax on banks.
The statement released by the leaders says: “We agreed the financial sector should make a fair and substantial contribution towards paying for any burdens associated with government interventions, where they occur, to repair the financial system or fund resolution, and reduce risks from the financial system. We recognised that there are a range of policy approaches to this end.
“Some countries are pursuing a financial levy. Other countries are pursuing different approaches.”
On banking capital, the G20 agreed a longer timetable for reforms, with the process set to begin in 2012 rather than be completed by that point.
The agreement says: “The amount of capital will be significantly higher and the quality of capital will be significantly improved when the new reforms are fully implemented.
“This will enable banks to withstand - without extraordinary government support - stresses of a magnitude associated with the recent financial crisis.”
Prime Minister David Cameron decided to push ahead with plans for a banking levy despite the lack of international consensus, as did the French and German governments.
In the emergency Budget, Chancellor George Osborne revealed details of a £2bn annual levy on banks starting in January 2011.
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