Germany draws up bank levy bill

28th June 2010, Comments 0 comments

The German finance ministry has drawn up a draft bill for a levy on banks to create a fund to prepare for potential future banking crises, according to a document seen by AFP on Monday.

According to the draft bill, which Chancellor Angela Merkel's cabinet is due to examine in late August, financial institutions would have to pay into a fund up to 0.04 percent of their balance sheets minus customer deposits each year.

Germany, France and the United States are among leading governments pushing all members of the Group of 20 industrial and developing nations to enact such levies.

Others, including Canada, China and India that did not need to prop up banks with taxpayer money during the financial crisis, are against such a levy.

G20 leaders failed to reach agreement on the issue at a weekend summit in Canada, deciding instead to push most discussions of regulation to their next meeting in November in South Korea.

The German government wants the levy to come into effect on December 31.

Banks with a balance sheet worth less than 10 billion euros (12 billion dollars) would pay 0.02 percent, those with 10-100 billion euros would contribute 0.03 percent, and 0.04 percent for those above.

The bill also includes a new two-pronged approach for the orderly winding-down of failing lenders.

-- Dow Jones Newswires contributed to this report --

© 2010 AFP

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