May 26, 2010
This story about a potential bank levy was published by EurActiv on 26th May 2010.
To prevent taxpayers from footing the bill for bailing out collapsing banks, the European Commission will propose today (26 May) that banks set up “preventive” funds, primarily financed from their liabilities and possibly their profits.
The Commission’s proposal is based on the so-called ‘polluter pays’ principle. It is designed to establish “a system which ensures that the financial sector will pay the cost of banking crises in the future,” according to the EU commissioner responsible for financial services, Michel Barnier.
“It is not acceptable that taxpayers should continue to bear the heavy cost of rescuing the banking sector,” reads a statement from the commissioner to be delivered today. To address this possibility, banks will be forced to put extra money aside as a sort of levy to finance resolution funds.
The proposals must still be approved by member states, possibly at the next summit of EU leaders, set to take place in Brussels in mid-June.
Should the leaders give the proposals their green light, the European Union will be in a position to present the plan at the next G20 summit in Toronto at the end of June, paving the way for global bank resolution funds.
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