People power to hit banks

London: With tax payers vehemently protesting the fact that their money was being used to bailout the banks and corporates that were responsible for causing the global meltdown, a new method is being devised by the international agency that may be more acceptable to the people.
Banks worldwide face the threat of new taxes to cover the cost of any future bailouts, including one on profit which have outraged taxpayers, under proposals by the IMF circulated to the Group of 20 leading developed and emerging market countries on Tuesday.
British finance minister Alistair Darling welcomed the IMF report, saying financial institutions have to pay something back to the societies in which they operate.

Bank lobbying groups, however, said they were concerned that new taxes could damage competitiveness.

We want proposals agreed as soon as possible, said Darling, who is scheduled to attend a meeting of G20 finance ministers and central bankers on the sidelines of an International Monetary Fund meeting in Washington on April 22-23.

I think there's every chance of getting an agreement. It may not be in the exact shape or form of what the IMF are saying, Darling told the BBC's Newsnight program.

Any agreement this week remains unlikely, not least because it was unclear whether European delegations would make it to the IMF/World Bank meetings in Washington given flying restrictions caused by a volcanic ash cloud, though European airports had begun to return to life on Tuesday.

First proposed by British Prime Minister Gordon Brown last November, support for a global levy has been gaining traction in Europe and the United States as politicians try to appease public anger and find a way to recoup the costs of trillion-dollar bailouts.

Canada, for one, remains opposed.

U.S. President Barack Obama has proposed a $90 billion tax on big banks designed to recoup taxpayer costs associated with the $700 billion government bailout of the U.S. financial system.

FAT CATS EYED

The IMF said this was just an interim report and a final version would be presented to G20 leaders in June.

The IMF estimated that the current crisis cost G20 countries about 2.7 percent of GDP, but was higher for countries like the United States where the crisis emanated from.

The report, made available on the BBC's website on Tuesday, proposes a Financial Stability Contribution, which would be used to cover the cost of any future financial sector bailouts to ensure that taxpayers will never again have to shell out trillions...
(finaccialexpress)