French banks should pay for supervision

19th October 2009, Comments 0 comments

Finance Minister Christine Lagarde said on Monday that French banks should pay for their supervision, but opposed an additional tax on their profits.

"There is no question of adopting a measure at the national level which would undermine the French banking system," Lagarde said in an interview in Les Echos about the 10% additional tax on bank profits supported by a parliamentary committee.

She said it is "logical" that banks be taxed so as to "pay for the expenses connected with the supervision" of the industry, but that France's tax rate on companies was already high and hiking it would hinder the country's international competitiveness.

The minister said she was thinking "about how to charge (banks) for the cost of strengthened banking supervision and improved protection for bank customers."

On Wednesday, the finance committee of the National Assembly, the lower house of parliament, supported a measure to slap an additional 10% tax on bank profits.

The measure, added to the 2010 budget, is to be taken up by the full Assembly next week.

The French Banking Federation (FBF) has expressed its opposition to the measure, and the government has also expressed its concern.


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