Britain and Canada disagree on bank levy

3rd June 2010, Comments 0 comments

Prime Minister David Cameron said on Thursday that Britain and G20 hosts Canada differed in their approach to a global banking levy.

Speaking after talks with visiting Canadian Prime Minister Stephen Harper, Cameron said: "There are differences on this issue but Canada and the UK have different experiences on this issue, we had a very large bailout by the taxpayers of the banks.

"I think it's quite legitimate for people to say in the future what we need is a bank levy to make sure that banks are paying a charge in respect in particular to unsecured lending."

Cameron said Britain would be arguing for that approach at the Group of 20 summit of developed and major developing countries in Toronto this month and hoped that others would follow suit.

Harper's government vehemently opposes proposals for a global bank tax, arguing that such a levy would ultimately be passed on to customers through higher banking fees.

"What is most important is that the G20 continues to work on implementing these reforms," he said.

"It is important for us to first do things on which we already agree."

Earlier this month, Harper wrote to G20 leaders to voice his opposition to the bank tax -- an opinion his officials said was "very well received."

Attempts to reach international agreement on coordinated bank taxes at G20 and IMF meetings in April ran aground.

Nations including Canada and Brazil, whose banking sectors emerged largely unscathed from the global financial crisis, objected to the plan, favouring higher capital reserve requirements instead.

But the European Union has pressed forward on the issue, unveiling a proposal for its own levy on banks, with the proceeds to be used to bail out banks in trouble.

The United States also backs a bank tax.

© 2010 AFP

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