Global bank tax a 'premature' idea: top regulator

4th May 2010, Comments 0 comments

The head of the Basel Committee on banking supervision, one of the top global bodies involved in post crisis reforms, on Tuesday dismissed proposals for a tax on banks as "premature."

"I am not by definition against it, but I think it's premature," Nout Wellink, chairman of the committee, told the Financial Times.

"I doubt whether this is a good idea. It's born out of frustration. There are strong political motives behind it."

Finance ministers from the G20 group of leading developed and emerging economies last month asked the International Monetary Fund to weigh levying taxes on big banks to help cut risk and pay, thus avoiding possible financial failures.

Meanwhile, Wellink's group of leading central bankers and national regulators is aiming to introduce proposals to strengthen international financial requirements on banks by the end of 2012.

They include tougher minimum capital and liquidity requirements.

The Basel Committee is also reviewing other possible measures on "systemically important institutions", banks that are big enough to have an impact on whole economies and the rest of the financial system if they run into trouble.

"We should first finalise the Basel package and then see whether it's still useful to have an additional levy or tax, or whathever you want to call it," said Wellink, who is also the head of the Dutch Central Bank.

G20 nations are divided over the global bank tax.

© 2010 AFP

0 Comments To This Article