French bank tax to target risky business: ministry
A French bank tax will target a lender's riskiest operations while receipts from the levy, estimated at hundreds of millions of euros a year, will be allotted to the state budget, a finance ministry source said Wednesday.
The government announced Tuesday that the tax would be incorporated in the country's budget. Finance Minister Christine Lagarde told the Wall Street Journal the levy would be worth a few hundred million euros a year.
France's European Union partners Britain and Germany also unveiled bank taxes on Tuesday. The British tax is expected to earn the state 2.0 billion pounds (2.4 billion euros, 2.9 billion dollars) while in Germany the measure is forecast to be worth 1.2 billion euros a year.
"It would be hard to have receipts equal to those in Britain because the British banking sector is much larger," a finance ministry official said.
"There will not be strict parity among the taxes in the different countries but it will be necessary to pay attention to an equivalence in the receipts" with regard to the size of the banking sector.
The ministry also confirmed that in France receipts would be allocated to the general state budget.
The EU executive commission has urged that the receipts be used to create a fund to to cope with weaknesses in a bank's accounts.
The ministry source in addition said the government favored an approach that "taxes risk-heavy assets."
He noted that offering home mortgage credit does not carry the same level of risk as does trading in complex financial instruments.
© 2010 AFP