Thursday, February 11, 2010

Global Bank Tax Gaining Steam - Brown

LONDON (Reuters) - Prime Minister Gordon Brown said the world's top economies were close to agreeing an international levy on banks and that a deal could be thrashed out during a G20 summit in June, the Financial Times reported.

In an interview published on Thursday, Brown said he believed backing for a global bank tax had gained momentum since U.S. President Barack Obama called for a fee to be levied on major U.S. financial institutions last month.

"People are now prepared to consider the best mechanism by which a levy could be raised," said Brown, who put forward an idea of a global transactions tax at a meeting of the Group of 20 nations in Scotland in November.

"I'm interested in the way support is building up for international action," Brown said.

At a meeting of the Group of Seven nations last week in Canada, finance ministers and central bankers called for closer study of a UK proposal for a bank levy to cover the cost of the bailouts of 2008 and 2009 that ran to hundreds of billions of dollars.

Brown, who is facing a parliamentary election due by June, floated the idea of a levy on financial transactions as one way to make banks pay for future bail-outs -- the so-called Tobin tax.

The U.S. administration has opposed a tax on financial transactions, but last month Obama proposed that Wall Street banks pay up to $117 billion in order to reimburse taxpayers for the financial bailout.

Obama has also called for a limit on banks' size and trading activities -- proposals that have been welcomed by France, Britain and Germany although none said they would follow suit.

The International Monetary Fund is compiling a report, due in April, on options for requiring banks to "make a fair and substantial contribution" towards bailouts.

(Reporting by Caroline Copley; Editing by Tomasz Janowski).

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