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Obama hits banks with $90bn levy

President Barack Obama has hit banks with a £55bn ($90bn) bank tax as he looks to curb investment banks risky activities.

Obama today revealed his Financial Crisis Responsibility Fee that he says will “recoup every last penny for American taxpayers”.

The fee, which will be active for at least 10 years, will be levied on all firms with more than £31bn of assets, including all G20 firms operating in the USA. It will raise £55bn over the next decade, rising to £72bn over 12 years.

The fee is 0.15 per cent of covered liabilities held by the institutions, every year. This is calculated by taking total assets and subtracting tier one capital ratios and all deposits covered by the Federal Deposit Insurance Corporation – meaning investment banks with smaller retail deposits will take the brunt of the tax charges.

Obama has created the levy in an attempt to pay back the taxpayer money lent through the Troubled Asset Rescue Program, which has cost the US £72bn.

President Obama says: “My commitment is to recover every single dime the American people are owed and my determination to achieve this goal is only heightened when I see reports of massive profits and obscene bonuses at the very firms who owe their continued existence to the American people.”

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