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Tax on big banks best way forward, says Turner

FSA chairman Lord Turner says that taxing the biggest banks by imposing higher capital requirements on them could be the best way to limit their size.

Speaking at the Treasury Select Committee this morning, Turner said that he liked US treasury secretary Timothy Geithner’s idea not of limiting the size of banks but of imposing stringent capital requirements on them.

He said the FSA and the Bank should think about introducing a sliding scale of capital requirements which would mean larger banks have to hold higher amounts of capital as would those banks involved in more risky trading.

He said: “It’s a tax on size. I think the idea of a tax on size, although it was not in the Turner review, I think is one that we do need to think about, and it is one we need to think about on a global level.”

He also warned against “iconising” the small banks model because although it would be different, it would still have its problems.

He said: “If they were very small we could have a different systemic problem. Lots of small banks have lots of interconnectedness and lots of potential domino effects. Remember that the 1929-33 banking collapse in the US was a banking collapse of lots of small banks, so we have to be careful of not iconising the small model.

So I don’t think there is an easy definition of what is the most stable banking structure between small and large banks.”


RAM and BMS Finance pitch new IHT solution

RAM Capital and boutique investment manager BMI Finance are promoting Sunstone Outsourcing, an inheritance tax mitigation solution that allows investors to shelter part payments from IHT.Sunstone buys IT infrastructure and systems that are essential for the running of businesses. It allows its client firms to use the systems through fixed price outsourcing contracts, typically for […]

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Auto-enrolment — don’t leave it too late…

With auto-enrolment (AE) well under way for the UK’s largest businesses, over the next three years an additional 800,000 smaller employers (with less than 60 employees) will start their journey to comply with the legislation. AE mandates all eligible employees and their respective employers to make regular pension contributions into a qualifying pension scheme. To learn more about the legislation read our brief Jelf AEase — simple steps to AE compliance guide.


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